Reasons Volatility ETFs Are Expected to Be Among the Worst Performers in 2025
Underperformance of Volatility ETFs: Volatility-linked ETFs, such as UVIX and UVXY, have significantly underperformed in 2025, with many down double digits as market stability has reduced investor anxiety, leading to a muted VIX index.
Structural Challenges: The structure of these ETFs, which rely on rolling VIX futures in a contango market, results in systematic losses, particularly for leveraged products, making them unsuitable for long-term holding in calm market conditions.
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Analyst Views on UVIX
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Significant ETF Withdrawals for UVIX and SYNB
ETF Outflow Details: The Putnam BioRevolution ETF experienced the largest outflow, losing 50,000 units, which is a 40.0% decline in outstanding units compared to the previous week.
Market Performance: In morning trading, Thermo Fisher Scientific saw a slight decrease of about 0.3%, while Abbvie experienced a modest increase of approximately 0.9%.
Video Content: A video segment discusses significant ETF outflows, specifically mentioning UVIX and SYNB.
Author's Perspective: The views expressed in the article are those of the author and do not necessarily represent the opinions of Nasdaq, Inc.
Reasons Volatility ETFs Are Expected to Be Among the Worst Performers in 2025
Underperformance of Volatility ETFs: Volatility-linked ETFs, such as UVIX and UVXY, have significantly underperformed in 2025, with many down double digits as market stability has reduced investor anxiety, leading to a muted VIX index.
Structural Challenges: The structure of these ETFs, which rely on rolling VIX futures in a contango market, results in systematic losses, particularly for leveraged products, making them unsuitable for long-term holding in calm market conditions.
Best-Performing Leveraged ETFs of Last Week
Market Performance: Last week, Wall Street experienced declines with the S&P 500 down 0.4%, Dow Jones down 1.3%, and Nasdaq down 0.6%, largely influenced by escalating tensions between Israel and Iran, while gold ETFs saw a rise of 3.6%.
Key Stock Movements: Oracle's stock surged 49% due to strong earnings and cloud momentum, while oil prices increased significantly following military actions in the Middle East, impacting energy stocks; Tesla shares rebounded 13.9% amid renewed government relations and upcoming product launches.
VIX jumps up to its highest level of 2025 as Trump's tariffs spur market volatility
Market Volatility Increase: The VIX Index has surged to its highest level in 2025, reaching 24.69, due to rising concerns over President Trump's tariff plans and the potential for a trade war, leading to increased investor anxiety and market uncertainty.
Shift in Investor Behavior: Investors are moving towards safer assets, as evidenced by a significant influx into U.S. Treasuries while avoiding equities, indicating a preference for stability amid heightened market risks.
UVIX, QCOC: Big ETF Inflows
ETF Inflows: The FT Vest Nasdaq-100 Conservative Buffer ETF - October saw the largest increase in inflows, adding 450,000 units, which is a 39.1% rise in outstanding units.
Market Performance: Proshares Ultra Semiconductors, a major component of QCOC, experienced a decline of approximately 4.5% during morning trading.
Market volatility jumps to its highest level in nearly three weeks (VIX)
Market Volatility: Wall Street experienced increased volatility, with the S&P VIX Index rising 12% to reach its highest level in nearly three weeks.
Fear and Sentiment Indicator: The VIX index hit a value of 22.78, indicating heightened fear and uncertainty among investors.
Significant ETF Withdrawals for UVIX and SYNB
ETF Outflow Details: The Putnam BioRevolution ETF experienced the largest outflow, losing 50,000 units, which is a 40.0% decline in outstanding units compared to the previous week.
Market Performance: In morning trading, Thermo Fisher Scientific saw a slight decrease of about 0.3%, while Abbvie experienced a modest increase of approximately 0.9%.
Video Content: A video segment discusses significant ETF outflows, specifically mentioning UVIX and SYNB.
Author's Perspective: The views expressed in the article are those of the author and do not necessarily represent the opinions of Nasdaq, Inc.
Reasons Volatility ETFs Are Expected to Be Among the Worst Performers in 2025
Underperformance of Volatility ETFs: Volatility-linked ETFs, such as UVIX and UVXY, have significantly underperformed in 2025, with many down double digits as market stability has reduced investor anxiety, leading to a muted VIX index.
Structural Challenges: The structure of these ETFs, which rely on rolling VIX futures in a contango market, results in systematic losses, particularly for leveraged products, making them unsuitable for long-term holding in calm market conditions.
Best-Performing Leveraged ETFs of Last Week
Market Performance: Last week, Wall Street experienced declines with the S&P 500 down 0.4%, Dow Jones down 1.3%, and Nasdaq down 0.6%, largely influenced by escalating tensions between Israel and Iran, while gold ETFs saw a rise of 3.6%.
Key Stock Movements: Oracle's stock surged 49% due to strong earnings and cloud momentum, while oil prices increased significantly following military actions in the Middle East, impacting energy stocks; Tesla shares rebounded 13.9% amid renewed government relations and upcoming product launches.
VIX jumps up to its highest level of 2025 as Trump's tariffs spur market volatility
Market Volatility Increase: The VIX Index has surged to its highest level in 2025, reaching 24.69, due to rising concerns over President Trump's tariff plans and the potential for a trade war, leading to increased investor anxiety and market uncertainty.
Shift in Investor Behavior: Investors are moving towards safer assets, as evidenced by a significant influx into U.S. Treasuries while avoiding equities, indicating a preference for stability amid heightened market risks.
UVIX, QCOC: Big ETF Inflows
ETF Inflows: The FT Vest Nasdaq-100 Conservative Buffer ETF - October saw the largest increase in inflows, adding 450,000 units, which is a 39.1% rise in outstanding units.
Market Performance: Proshares Ultra Semiconductors, a major component of QCOC, experienced a decline of approximately 4.5% during morning trading.
Market volatility jumps to its highest level in nearly three weeks (VIX)
Market Volatility: Wall Street experienced increased volatility, with the S&P VIX Index rising 12% to reach its highest level in nearly three weeks.
Fear and Sentiment Indicator: The VIX index hit a value of 22.78, indicating heightened fear and uncertainty among investors.
