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The World’s Biggest Volatility ETF Grows 40% in Just Four Days

Published 11/02/2021, 11:56 pm
Updated 12/02/2021, 12:00 am
© Reuters

(Bloomberg) -- The biggest exchange-traded fund that profits from U.S. stock volatility has added more than $600 million of new money in less than a week.

The ProShares Ultra VIX Short-Term Futures ETF (ticker UVXY) now boasts $2.2 billion in assets, up from $1.6 billion late last week, according to data compiled by Bloomberg. Activity in the fund is surging, with trading volume on Wednesday jumping to more than three times the one-year average.

Exactly what’s behind the sudden frenzy remains unclear. Some of the recent demand may be driven by wagers on the Cboe Volatility Index to rise. However investors could also be acquiring shares of UVXY in order to lend them out -- in effect betting against it and on enduring calm in the equity market.

The latter view finds some support in the number of shares sold short, which has jumped to about 4.6 million -- the highest since March -- according to data from IHS Markit Ltd.

Read more: Traders Shorting VIX Spur Inflows to $1.2 Billion Fund Down 34%

UVXY has attracted net inflows of $2.22 billion in the past year. The following table shows the fund’s biggest holdings as of Feb. 10:

(Updates throughout with context, data)

©2021 Bloomberg L.P.

 

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