Trick or Treat: Meet the Scariest Exchange Traded Product

TEPIX is a high-risk exchange-traded product designed for sophisticated investors. It aims to provide double the returns of the S&P 500 short-term futures index for a single day. The product involves a daily rolling long position in VIX futures contracts, maintaining a constant weighted maturity of one month. Despite its liquidity and $1 billion in assets, TEPIX has a high expense ratio and a negative long-term return. It is intended for short-term tactical use, with significant risks involved.

What is the primary purpose of the TEPIX fund?

• To provide long-term investment stability

• To offer a safe investment option for beginners

• To serve as a daily trading tool for sophisticated investors

• To track the performance of the S&P 500 over a year

How does TEPIX aim to manage risks for investors?

• By investing in long-term government bonds

• By maintaining a fixed interest rate

• By providing double the returns of the S&P 500 short-term futures index for a single day

• By diversifying across multiple asset classes

What strategy does TEPIX use to maintain a constant weighted maturity?

• Investing in a mix of stocks and bonds

• Rolling long positions in the 1st and 2nd month VIX futures contracts

• Holding cash reserves

• Investing in real estate

What is the expense ratio of TEPIX?

• 100 basis points

• 50 basis points

• 165 basis points

• 200 basis points

Why might the long-term performance of TEPIX not concern some investors?

• Because it is designed for short-term tactical gains

• Because it is a low-risk investment

• Because it guarantees positive returns

• Because it is backed by government securities