Volatility ETF lists debute on Taiwan Stock Exchange

The first-ever ETF tracking a U.S. volatility futures index debuted on the Taiwan Stock Exchange (TWSE) today. The listing of the ‘Fubon S&P 500 VIX Short-Term Futures ETF’ (stock code: 00677U), issued by Fubon Securities Investment Trust Co. Ltd., will also add further diversity to Taiwan’s fast-expanding ETF market.

The new ETF tracks the S&P 500 VIX Short-Term Futures Index Excess Return, which offers exposure to a daily rolling long position in the first and second month Volatility Index Futures (VIX Futures), listed on the Chicago Board Options Exchange (CBOE). The underlying index of the VIX Futures is the Volatility Index (VIX Index), which is calculated based on the prices of S&P 500 Index options and negatively correlates with movements in the S&P 500 Index.

Dr. Jun-ji Shih, Chairman of the Taiwan Stock Exchange, said:

With the growing uncertainties in major international and regional markets, the availability of the S&P 500 VIX Short-Term Futures ETF in Taiwan provides investors with a new investment tool for short-term hedging, especially during times of high market volatility. Its listing is also a further step in the development of TWSE’s ETF market. We will continue to work together with issuers to bring more innovative and diversified investment products to the Taiwan market and enrich the investment options for investors.

As of 23 December 2016, the total AUM of the Taiwan ETF market was NT$272 billion (US$8.5 billion), with an average trading of NT$7.06 billion (US$220 million), representing 9% of total trading on the TWSE. There is now a total of 62 ETFs listed on the TWSE.

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