WEIX Profile
The Dynamic Short Short-Term Volatility Futures ETF is an actively managed fund designed to capitalize on anticipated declines in volatility. The fund achieves its investment objective by establishing short positions in VIX Futures Contracts, which are derivatives based on the CBOE Volatility Index (VIX). This index reflects market expectations of future volatility, and by shorting these futures contracts, the fund aims to profit from decreases in market volatility.
Under normal market conditions, the fund primarily takes short positions in the two nearest-term VIX Futures Contracts. It maintains this exposure by rolling the front month VIX Futures Contract to the next month on a daily basis, ensuring that the fund remains consistently positioned in short-term volatility futures. This approach allows the fund to potentially benefit from declines in short-term volatility while managing the roll-over of contracts to maintain its investment stance.
The fund's strategy involves frequent adjustments and active management of its futures positions to align with changes in the volatility index. By focusing on short-term VIX Futures Contracts, the fund seeks to exploit market inefficiencies and capture potential declines in volatility. This tactical approach requires continuous monitoring and adjustment of the fund's positions in response to evolving market conditions and volatility forecasts.
As a non-diversified fund, it has concentrated exposure to the volatility futures market, which may lead to heightened risk and volatility compared to more diversified investment options. Investors should be aware that the fund's performance is closely tied to movements in short-term volatility and the effectiveness of the advisor's strategy in managing futures positions. This concentrated focus offers the potential for significant returns in declining volatility environments but also carries the risk of substantial losses if market conditions shift unexpectedly.
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