This is a good article explaining why these products don’t work. I’ve been railing against synthetic ETFS for some time. What I mean by synthetic is an instrument that tries to mimic an index or futures contract and is NOT actually the index or future itself. They just don’t work. In fact they fail miserably for the most part. It’s small wonder why many money managers fail because they opt out for lazy man macro decisions composing their client’s portfolios entirely from ETFs.
What Really Happened with TVIX
March 23rd at 9:33am by John Spence
TVIX Falls More After Credit Suisse Restarts Issuance
Institutional Investors Favor ETFs
Why a Volatility-Linked ETN is Diverging from the VIX
VelocityShares Daily 2x VIX Short-Term ETN (NYSEArca: TVIX) is in a two-day meltdown because the premium to net asset value is snapping back sharply after surging as high as 90% earlier in the week.