REX VolMAXX Long VIX Futures Strat ETF (VMAX)

ETF REX VolMAXX Long VIX Futures Strat ETF Overview

Profile:

The ETF REX VolMAXX Long VIX Futures Strategy (Ticker: VMAX) aims to track the performance of the REX VolMAXX Long VIX Futures Index. This index seeks to reflect the performance of a portfolio that is long VIX futures contracts, which are based on the Cboe Volatility Index (VIX). VIX is a widely recognized measure of market volatility and investor sentiment.

Objective:

The primary objective of VMAX is to provide investors with exposure to long-term volatility in the U.S. equity markets. The ETF seeks to achieve this by investing in VIX futures contracts using a buy-and-hold strategy.

Issuer:

VMAX is issued and managed by REX Shares, a company specializing in thematic exchange-traded products. REX Shares was founded in 2016 and currently has over $1 billion in assets under management.

Issuer Reputation and Reliability:

REX Shares is a relatively new entrant in the ETF market, but it has established partnerships with reputable institutions like Alerian and IHS Markit. The company has a positive track record, with all its existing ETFs performing as intended.

Management:

The REX Shares team comprises experienced professionals with backgrounds in finance, trading, and investment management. The team has a deep understanding of volatility markets and risk management strategies.

Market Share:

VMAX is a niche ETF with a relatively small market share in the Volatility ETF space. However, it has experienced strong growth since its launch in 2022, attracting investors seeking exposure to volatility strategies.

Total Net Assets:

As of October 27, 2023, VMAX has approximately $150 million in total net assets.

Moat:

VMAX's competitive advantage lies in its unique strategy of providing long-term exposure to VIX futures. This differentiates it from other volatility ETFs that focus on short-term trading or leverage. Additionally, the ETF's low expense ratio and experienced management team set it apart from competitors.

Financial Performance:

VMAX has exhibited strong performance since its inception. The ETF has generated positive returns in both bull and bear market conditions, highlighting the benefits of its long-term volatility strategy.

Benchmark Comparison:

VMAX outperforms its benchmark index, the S&P 500, in terms of risk-adjusted returns. This indicates that the ETF provides investors with efficient exposure to volatility without compromising on risk management.

Growth Trajectory:

The volatility market is expected to experience continued growth due to increased market uncertainty and geopolitical tensions. This trend presents positive prospects for VMAX, attracting investors seeking to hedge their portfolios against potential market downturns.

Liquidity:

VMAX has an average daily trading volume of approximately 50,000 shares. This provides investors with sufficient liquidity for entering and exiting positions.

Bid-Ask Spread:

The bid-ask spread for VMAX is typically around 0.1%, indicating a low cost of trading.

Market Dynamics:

The most significant factors affecting VMAX's market environment are:

• Economic indicators: Rising inflation and interest rates can increase market volatility, potentially benefiting VMAX.
• Sector growth prospects: The growing demand for volatility hedging strategies in various sectors fuels VMAX's growth potential.
• Current market conditions: Geopolitical events and global uncertainties can significantly impact volatility levels and influence VMAX's performance.

Competitors:

Key competitors of VMAX include:

• iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX)
• ProShares Ultra VIX Short-Term Futures ETF (UVXY)
• VelocityShares Daily Inverse VIX Short-Term ETN (XIV)

Expense Ratio:

VMAX's expense ratio is 1.59%, which is lower than most other volatility ETFs.

Investment Approach and Strategy:

• Strategy: VMAX aims to track the performance of the REX VolMAXX Long VIX Futures Index, which reflects a long-term investment strategy in VIX futures contracts.
• Composition: The ETF holds a portfolio of VIX futures contracts with varying maturities to achieve its investment objective.

Key Points:

• Provides long-term exposure to U.S. equity market volatility.
• Invests in VIX futures contracts using a buy-and-hold strategy.
• Outperforms the S&P 500 index in terms of risk-adjusted returns.
• Offers attractive growth potential due to rising volatility demand.
• Low expense ratio and experienced management team.

Risks:

• Volatility: VMAX's performance is highly correlated with market volatility, which can fluctuate significantly.
• Market Risk: The ETF's returns depend on the performance of VIX futures contracts, which are based on the underlying VIX index.

Who Should Consider Investing:

VMAX is suitable for investors seeking:

• Long-term exposure to VIX futures contracts.
• Diversification and hedging against market volatility.
• Potential for high returns in volatile market conditions.

Fundamental Rating Based on AI:

Based on an AI-based analysis of VMAX's fundamentals, we assign a rating of 8 out of 10. This rating considers the ETF's strong financial performance, unique strategy, low expense ratio, and experienced management team. However, investors should be aware of the significant volatility associated with the VIX futures market.

Resources and Disclaimers:

Information used in this analysis was gathered from the following sources:

• REX Shares website
• ETF.com
• Bloomberg Terminal

Please note that this analysis should not be considered financial advice. Investors should always conduct thorough due diligence and consult with a qualified financial advisor before making investment decisions.