VelocityShares Fills Pipeline

By ETFDatabase | September 28, 2012 AAA

Investors endured another slow trading week with mixed economic data releases on Wall Street, paving the way for another wave of profit-taking. As major equity indexes drifted sideways with a downward bias, several key developments took place on the ETF front; Charles Schwab cut expenses on all 15 of its ETFs while Global X announced it was shuttering the doors on four of its funds. VelocityShares also made a splash on the product development front with its SEC proposal for a basket of ETFs.

Connecticut-based VelocityShareshas filed plans with the SEC to beef up its existing ETN-only lineup with several intriguing ETFs:

  • VelocityShares Tail Risk Hedged Large Cap ETF: This ETF will consist of three underlying index ETFs that track the S&P 500 Index, including SPY, VOO and IVV, while the tail hedge component will consist of two volatility products: the Ultra VIX Short-Term Futures ETF (UVXY) and the Short VIX Short-Term Futures ETF (SVXY). The SEC filing also stated that at each monthly rebalance, the portfolio composition will be split 85/15 among equity and volatility holdings, respectively .
  • VelocityShares Volatility Hedged Large Cap ETF: This ETF will feature the same portfolio composition as the fund profiled above, with the distinguishing factor being how much is allocated to each of the volatility ETFs. The Tail Risk fund will dedicate 45% to UVXY and 55% to SVXY, while this Hedged ETF will dedicate one-third to UVXY and two-thirds to SVXY.
VelocityShares will also look to launch three equity-based strategies :
  • VelocityShares Emerging Markets Depository Receipt ETF: This broad-based ETF will features allocations to equities spanning 21 emerging markets. The top three allocations by country in its underlying index are Brazil, Russia and China.
  • VelocityShares Russia Select Depository Receipt ETF: This ETF will look to track theperformanceof depository receipts of companies located in Russia.
  • VelocityShares Emerging Asia Depository Receipt ETF: This ETF will target developing Asian nations, including: China, South Korea, Taiwan, India, Indonesia and the Philippines.

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Disclosure: No positions at time of writing.

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