Investors Continue To Buy VIX Despite High Cost

It’s a well-known fact that VIX ETFs are a poor way of trying to play this key measure of volatility but this doesn’t seem to be stopping retail investors.

According to a funds flow report from JP Morgan, published at the end of last week, retail investors continue to plough money into VIX ETFs in an attempt to profit from their belief that the current combination of very low realiaed equity volatility and record high equity prices is unsustainable.

2016 Hedge Fund Letters

Investors Continue To Buy VIX Despite High Cost

There is some logic in a VIX trade. The VIX is currently under 12 compared to levels over 20 into the US election in November last year, or over 25 post-Brexit last...