Sometimes Inverse / Leveraged Volatility Funds Outperform Their Leverage Factors
From August 2nd to October 3rd, 2011 Barclays’ S&P 500 VIX Short Term Futures ETN (VXX) had a great 137% runup. In that same period VelocityShares’ TVIX ETN, 2X leveraged on the same index went up an astonishing 348%, 73 percent more than its 2X leverage factor would project. How is that possible? Don’t inverse and leveraged funds always underperform the index they’re tracking? Normal …
