Saturday, 28 March 2015
Last updated 11 hours ago
Aug 29 2012 | 12:33pm ET
First Trust Advisors is bringing the black swan to the New York Stock Exchange.
The exchange-traded fund specialist will offer a volatility tail-risk ETF tomorrow. The First Trust CBOE S&P 500 VIX Tail Hedge Fund will invest in Standard & Poor's 500 Index and call options on the CBOE Volatility Index. The latter will serve as a hedge against big drops in the S&P.
"A steep and sudden drop in equity market prices, such as a downward move of 20% or more in a month, is thought of as an unlikely or 'tail' occurrence," First Trust writes in the prospectus. "The index is designed to help cope with these extreme downward movements in the market by hedging its portfolio through purchasing call options on the VIX Index, or 'tail hedging.'”
The fund will not always be so hedged; it will invest 0%, 0.5% or 1% of its assets in VIX calls "depending on the level of forward expected volatility in the S&P 500." At times when it holds no VIX calls—when VIX Index futures are less than or equal to 15 or greater than 50—the fund will hold only an S&P 500 index fund.
Unlike the two-and-20 (or more) charged by many tail-risk hedge funds, the ETF, which will trade under the ticket symbol VIXH, will have a mere 0.6% management fee.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…