5 Best VIX ETFs to buy for Q2 2024

Thinking the stock market is about to get more volatile? This page explains the pros and cons of investing in an index and compares the best VIX ETFs.
By:
Updated: Aug 22, 2023
Listen

Trade your favourite markets with our top-rated broker, Plus500.

7.8/10

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Visit site

Exchange-traded funds (ETFs) are becoming an increasingly popular way to invest in conventional stock indices, as well as a volatility index such as the VIX. This page will help you learn the best strategies for investing in it.

What are the top VIX ETFs to buy?

Copy link to section

While the VIX isn’t as commonly traded as a benchmark stock index like the S&P 500, there are still multiple options to choose from. We profile the best ones in the table below. Some of the most prominent around today include:

#ETF nameGet started
1ProShares VIX Short-Term Futures ETF (VIXY)
Invest now

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2ProShares VIX Mid-Term Futures ETF (VIXM)
Invest now

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3Fidelity Low Volatility Factor ETF (FDLO)
Invest now

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

4Simplify Volatility Premium ETF (SVOL)
Invest now

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

5ProShares Short VIX Short-Term Futures ETF (SVXY)
Invest now

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

List selected by our team of analysts, updated April 2024

1. ProShares VIX Short-Term Futures ETF (VIXY)

Copy link to section

The ProShares VIX Short-Term Futures ETF (VIXY) exposes investors to near-term market volatility by tracking the S&P 500 VIX Short-Term Futures Index. This benchmark includes a portfolio of monthly VIX futures contracts reflecting the expected 30-day volatility of the S&P 500. 

As a VIX ETF, VIXY allows traders to speculate on or hedge against upcoming volatility. It offers useful volatility exposure for sophisticated investors seeking a quick hedge. With VIXY, traders gain access to the key fear gauge – the Cboe Volatility Index.

Sign-up & trade ProShares VIX Short-Term Futures ETF

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. ProShares VIX Mid-Term Futures ETF (VIXM)

Copy link to section

The ProShares VIX Mid-Term Futures ETF (VIXM) tracks the S&P 500 VIX Mid-Term Futures Index, composed of VIX futures contracts reflecting volatility 3-6 months out. VIXM provides targeted exposure to mid-term volatility while limiting short-term noise.

Its holdings roll continuously to maintain a constant maturity window. VIXM allows sophisticated traders to benefit from potential increases in the Cboe Volatility Index over medium horizons, distinguishing it from short-term focused sentiment.

Sign-up & trade ProShares VIX Mid-Term Futures ETF

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3. Fidelity Low Volatility Factor ETF (FDLO)

Copy link to section

The Fidelity Low Volatility Factor ETF (FDLO) aims to mimic Fidelity’s Low Volatility Factor index, comprising US large and mid-cap stocks with lower historical volatility. As an actively managed fund, FDLO seeks smoother returns by limiting exposure to the most volatile sectors and stocks. 

This volatility ETF provides an option for investors wanting to manage market volatility in their portfolio while maintaining US equity exposure. FDLO is suited to investors who know what they’re doing and offers a strategy focused on curbing risk and swings associated with broad equity benchmarks.

Sign-up & trade Fidelity Low Volatility Factor ETF

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

4. Simplify Volatility Premium ETF (SVOL)

Copy link to section

The Simplify Volatility Premium ETF (SVOL) aims to profit from the difference between current and expected future VIX futures prices. This volatility ETF sells first and second month VIX futures contracts and collaterals the exposure with T-bills. 

The strategy seeks to use a volatility risk premium over time by monetising the gap between spot and forward volatility indexes. SVOL provides concentrated exposure to this volatility arbitrage strategy as an actively managed fund.

Sign-up & trade Simplify Volatility Premium ETF

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

5. ProShares Short VIX Short-Term Futures ETF (SVXY)

Copy link to section

The ProShares Short VIX Short-Term Futures ETF (SVXY) provides inverse exposure to near-term market volatility by tracking the inverse performance of the S&P 500 VIX Short-Term Futures Index. 

As a short VIX ETF, SVXY aims to appreciate when volatility declines. It provides sophisticated traders with an instrument to hedge or profit from falling expectations in near-term volatility, as represented by the Cboe Volatility Index. SVXY can be useful as part of a volatility trading strategy for investors with a bearish short-term outlook on volatility.

Sign-up & trade ProShares Short VIX Short-Term Futures ETF

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Where to buy the best VIX ETFs

Copy link to section

Multiple different online brokers offer ETFs, so you’ll need to pick one that works best for your specific investing needs. You can find a broker quickly and easily by simply selecting one from the table below:

Sort by:

1
Min. Deposit
$ 100
Best offer
User Score
10
Trade +2000 CFDs on Shares, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads with up to 1:5 leverage
Start Trading
Payment Methods:
American Express, Apple Pay, Bank Transfer, Credit Card, Debit Card, Discover, Google Pay, Mastercard, PayPal, SEPA, Trustly, Visa, , skrill
Full Regulations:
ASIC, FCA, FSA, MAS, cysec-250-14-regulator, isa-regulator

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2
Min. Deposit
$ 10
Best offer
User Score
9.9
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Credit Card, Debit Card, PayPal, Wire Transfer
Full Regulations:
CySEC, FCA

Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB.

3
Min. Deposit
$ 0
Best offer
User Score
9.6
Get insights from millions of investors, creators, and analysts
Build your portfolio of stocks, ETFs, and crypto–all in one place
No minimum deposit
Start Trading
Payment Methods:
Bank Wire, Check, Debit Card, Wire Transfer
Full Regulations:
Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

What is a VIX ETF?

Copy link to section

A VIX ETF is an exchange-traded fund that tracks the movement of the VIX, going up or down based on levels of market volatility. The VIX itself is the Chicago Board Options Exchange’s CBOE Volatility Index, and is sometimes referred to as the ‘fear index’. It is a popular measure of the stock market’s expectation of volatility and works by tracking the performance of the S&P 500 index. 

The ProShares VIX Short-Term Futures ETF (VIXY) and ProShares VIX Mid-Term Futures ETF (VIXM) are two of the most popular ones that can be traded today.

How do I trade VIX index ETFs?

Copy link to section

We already covered how buying an ETF can require more study than buying, say, an S&P 500 ETF. If you’re fine with the more complex nature of the VIX, here are three factors to review before making your ETF purchase:

  1. How to choose an ETF
  2. How to choose a broker 
  3. Use our top tips to succeed
Start trading now

1. How to choose an ETF

Copy link to section

Here’s a look at some more factors to consider when deciding on a VIX ETF to buy:

  • Total value of assets. The higher the total value of assets in an ETF, the better its liquidity will be, and the tighter its price spreads will be. These are both positives for investors. Lower liquidity means you’ll be taking on more risk and possibly more costs.
  • Charges and fees. ETFs charge significantly lower fees than index funds, making them a better bang for your buck. ETFs are also easier to trade than index funds, since you can trade them in real time, as you would a stock. However, there will still be fees applicable, so ensure these are of a reasonable level before you start.
  • Daily trading volume. The higher the daily volume, the better. Higher volume levels tend to produce more stability and less frequent wild price swings. 
  • Performance over time. Look for an ETF with a strong track record, as that’s a good indicator of how well it will likely perform in the future.
  • Liquidity. The more liquidity, the more interest it will attract, and the more stable its price action is likely to be.
  • Location and tax status. An ETF’s tax status can sometimes change based on the country in which it’s based. If you’re deciding between two with similar track records and one of them is based in a lower-tax country, that could be your better bet.
  • Leverage. Trading with leverage means you’re putting down a small percentage of the total trade, with your broker covering the rest. Trading with leverage means bigger gains than non-leveraged trades when you guess right but also bigger losses than non-leveraged trades when you’re wrong. That makes it a strategy that’s generally best suited for more experienced investors.

2. How to choose a broker

Copy link to section

If you want to trade ETFs, then you’ll need to find a broker that can facilitate these trades. There are a wide variety of different online trading platforms from which you can choose, so we’ve compiled this list of what you want to look out for when selecting the right broker for you. 

  • What services they offer. The first step you need to check is that the broker you have selected offers ETF trading, and whether – if so – you’ll be able to use the platform to buy and trade VIX ETFs. Beyond this you might want to check other trading options the broker offers, such as how much leverage you can trade with.
  • Whether the platform offers a demo account. If you’re new to ETF trading, then it’s wise to start off with a demo account. These are offered by many brokers and allow you to place trades without risking any of your capital. You won’t make any money with a demo account, but using one to learn the ropes can prevent losses later on.
  • The fees charged. Trading ETFs often incurs fees, and these will vary from broker to broker. Sometimes there’ll be a flat rate for making trades, and sometimes brokers will charge commission. Check out the fees charged by a broker before signing up to their service.
  • Financial limits. Brokers will often apply a variety of limits to users’ trading activities. This can include deposit/withdrawal minimums and maximums or daily ETF trading limits. Make sure you pick a provider that can cater to the level of trading you’re looking to be doing.
  • Security features and regulation. When investing your money with a platform, you want to ensure that it is reputable, complies with relevant legislation, and has good online security features. You can find reliable brokers by looking through our reviews, or simply follow the links to brokers that are listed on this page.

3. Use our top tips before investing

Copy link to section

Before investing, make sure you have a sound investing plan. Follow these steps to build that plan:

  • Do your research. Study the top ETFs, which we reviewed earlier. Compare each one to your own specific investing goals before deciding which one to choose.
  • Set a budget. Setting a budget ensures that you have plenty of money left over for future trades, even if your first attempt at buying one goes wrong. Most importantly, you should never invest more than you can afford to lose.
  • Select the right platform. Choose an online broker based on the size of its transaction fees, ease of use, track record, and strength of reputation. We have comprehensively reviewed all your best options to help you make the best decision.
  • Grow your investments over time. As a beginner investor, consider starting small. You can always raise the size of your investments as you get better with time.
  • Think long-term. The best VIX ETFs are much more conducive to short-term trading than a typical stock index like the S&P 500, because it’s more volatile. So when we say think long-term, in this case we’re advising that you consider making the VIX part of a larger portfolio, while looking for different investment assets to trade for potential longer-term gains.

Are VIX ETFs a good investment?

Copy link to section

ETFs are a more complex investment than a typical stock market index, because you’re betting on expected market volatility rather than simply trying to invest in an index you feel will rise in value. That said, if you invested in the VIX in, say, mid-February 2020 and sold a month later, you would have made a very large profit, due to fears over the economic impact of COVID-19 causing market chaos.

There’s still plenty of risk involved in buying into an ETF, though. For instance, if you thought that massive job losses caused by COVID-19 would trigger one continuous spike in market volatility, you would have been proven wrong, as the VIX has pulled back sharply since its March 2020 peak.

FAQs

Copy link to section
Why don’t VIX ETFs always track the VIX?
Why do VIX ETFs have negative returns?
Can I invest in a volatility ETF through an ISA or SIPP?


Sources & references
Risk disclaimer
Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.