ProShares VIX Short-Term Futures ETF

VIXY

Market cap $88.3M

As trade war tensions reignite and AI bubble fears mount, investors eye ETFs like VXX, VIXY and VIXM to hedge against rising market turmoil.

The artificial intelligence sector is showing critical warning signs that suggest a significant correction may be approaching. Recent market analysis reveals that AI stocks, particularly the “Magnificent Seven,” have been making lower highs since December 2024, diverging from broader market performance – a pattern that historically precedes major corrections.

Tariff uncertainty and Fed moves cloud Wall Street, but VXX, VIXY and VIXM ETFs stand out as volatility plays.

ProShares VIX Short-Term Futures ETF offers exposure to volatility, but is best suited for short-term trading due to significant time decay. S&P VIX Index remains near 2025 lows despite economic and geopolitical risks, with potential for sudden spikes if market corrections occur in September or October. VIXY underperforms the VIX during volatility surges and carries high risk, earning poor grades in momentum, risk, and expenses.

Rising inflation, record U.S. debt and AI-driven risks are fueling volatility, ETFs like VXX, VIXY and VIXM offer timely hedging options.

VIX-related ETFs offer asymmetric return potential, especially with current volatility levels well below historical averages, making long-VIX trades attractive now. Recent market calm masks significant geopolitical and economic risks, including unresolved trade tensions and the outsized influence of AI-driven stocks. The VIX's current low percentile suggests markets are underpricing uncertainty, despite ongoing global instability and unpredictable policy moves.

ProShares VIX Short-Term Futures ETF offers short-term exposure to S&P 500 volatility, acting as a hedge during sharp market declines, but is not suitable for long-term holding. Due to futures roll costs and long-term market growth, VIXY tends to decay in value over time, making it best for tactical, short-term trades. Risks include value erosion, unpredictable volatility spikes, and complex tax implications, so careful timing and position management are essential.

As inflation, debt fears and Fed uncertainty rise, VXX, VIXY and VIXM offer a tactical hedge for short-term volatility.

Volatility ETFs like VXX and VIXY are climbing as geopolitical tension and policy chaos rattle investor confidence.

Volatility ETFs are on the rise as Trump's renewed tariff threats sent the VIX fear gauge soaring 29.3% last week.