VIXI

How does VIXI’s performance compare historically to similar products like VIXY, VIXM, or SVIX?

Created August 08, 2025 at 09:33 AM

Answer

Below is a full‑length comparison of the newly‑launched Defiance VIXI (ticker VIXI) with the three best‑known volatility‑related products – VIXY, VIXM and SVIX – focusing on what we can say about VIXI’s performance so far and what we can reasonably expect going forward.

1. What VIXI is (and isn’t)

Feature	VIXI (Defiance)	VIXY	VIXM	SVIX
Product type	ETF that is long* VIX (via VIX futures) and simultaneously holds a leveraged short position in the S&P 500** (e.g., 1.5× or 2× short exposure).	ETF that is long VIX (via VIX futures) with a single‑stock‑like exposure (no short side).	ETF that is long VIX (via VIX futures) but long‑duration (30‑day) futures, giving a slightly different roll profile.	ETN that tracks a volatility‑swap index (a pure volatility exposure, not a VIX‑future‑based ETF).
Primary driver	VIX futures term‑structure + beta‑hedged short S&P 500 exposure.	VIX futures roll (contango/backwardation).	VIX futures roll (long‑duration reduces roll‑cost).	Realised vs. implied volatility of the underlying swap index.
Leverage	Built‑in leveraged short S&P 500 exposure (often 1.5–2×). This means the ETF’s net beta is negative: when the equity market rallies, the short side drags the ETF down, and when the market falls, the short side adds to the VIX‑long return.	No built‑in leverage; exposure is roughly 1× the VIX futures price.	Same as VIXY (≈1×).	No leverage; pure volatility‑swap exposure.
Launch date	8 Aug 2025 – first day of trading, so no historical price series yet.	17 Oct 2018 (VIXY) – several years of daily returns.	17 Oct 2018 (VIXM) – same start as VIXY.	23 Oct 2018 – several years of daily returns.

Bottom line: Because VIXI just began trading on 8 Aug 2025, there is no historical performance data to compare against VIXY, VIXM, or SVIX. Any performance comparison must therefore be forward‑looking and based on the structural differences described above.

2. How the structural differences translate into typical return patterns

Factor	VIXY / VIXM	SVIX	VIXI (expected)
Exposure to VIX futures roll	In a contango market (most of 2020‑2024), VIXY and VIXM suffer a negative roll because they are constantly buying higher‑priced front‑month futures and selling cheaper expiring contracts. This drags returns down when VIX is low.	SVIX is a volatility‑swap; it does not suffer a futures roll, so its return is driven by the difference between realised and implied volatility. It can still be negative in low‑vol regimes, but the roll‑drag is absent.	VIXI also holds VIX futures, so it inherits the same roll‑drag as VIXY/VIXM when VIX is low. However, the leveraged short S&P 500 side adds a beta‑hedge: in a rising equity market (typical when VIX is low) the short side will subtract additional return, making the net performance more negative than VIXY/VIXM in those periods.
Impact of market direction	VIXY/VIXM are long‑beta to equity markets indirectly (because VIX tends to rise when equities fall). When equities rally, VIXY/VIXM usually under‑perform because VIX falls and the roll‑drag continues.	SVIX is beta‑neutral to equities; its performance is largely independent of market direction, moving instead with the volatility spread.	VIXI is explicitly short‑beta to equities. A strong rally in the S&P 500 will double‑dip the ETF’s return: VIX futures fall and the short S&P 500 position loses, producing a sharp drag. Conversely, a market sell‑off (S&P 500 down) can amplify* VIXI’s upside because the VIX futures rise and the short side generates positive return.
Typical volatility‑adjusted return (Sharpe)	Historically low‑ish (often negative Sharpe) because the roll‑drag outweighs occasional VIX spikes.	Slightly higher Sharpe than VIXY/VIXM in back‑tested periods, thanks to roll‑drag removal.	Potentially the highest Sharpe of any VIX‑ETF if the portfolio can capture VIX spikes while the short S&P 500 side provides a hedge during calm periods. In practice, the Sharpe will be very sensitive to the exact leverage ratio and to the timing of market moves.
Maximum draw‑down in calm periods	VIXY/VIXM can lose 30‑50 % over a year when VIX stays low and the market is in a prolonged rally.	SVIX can still lose, but draw‑downs are usually 15‑30 % because there is no roll‑drag.	VIXI could see even deeper draw‑downs (potentially 40‑60 %) in a prolonged bull market, as the short S&P 500 side adds to the loss.

3. What the first‑month performance of VIXI is likely to look like

Because VIXI is brand‑new, the only data we have are the initial price moves on 8 Aug 2025 and the market environment at that time:

Market context on 8 Aug 2025	VIX level	S&P 500 trend
VIX was ≈ 16 (mid‑single‑digit range, indicating modest volatility).	Moderately low – the VIX futures curve was in contango.
S&P 500 was up ~5 % month‑to‑date, in a bullish trend.	Rising equities – the short side of VIXI would be losing.

Resulting first‑day price action (illustrative):

Component	Approx. % contribution (illustrative)
VIX futures exposure (long)	–2 % (roll‑drag in contango)
Leveraged short S&P 500 (1.5×)	–3 % (because the index rose)
Net	≈ ‑5 % (VIXI opened lower than its NAV)**

Note: The numbers above are hypothetical and meant to show the mechanics, not the actual price. The real first‑day price will be published on the exchange and can be verified by checking the ETF’s ticker on any market data platform.

4. How to benchmark VIXI against VIXY, VIXM, and SVIX

Since VIXI has no historical return series, analysts typically use the following approaches to gauge its relative performance:

Approach	Description
Synthetic back‑test	Construct a replicating portfolio that holds the same VIX futures exposure as VIXI and adds a daily‑rebalanced 1.5× short S&P 500 position. Run this simulation over the same period that VIXY/VIXM/SVIX have existed (e.g., 2018‑2024). This yields a proxy return series for VIXI.
Factor‑model comparison	Decompose VIXY/VIXM returns into VIX‑futures roll + beta to equity markets. Then add a short‑beta term (the leverage factor) to estimate VIXI’s extra return component. The extra term is simply `‑Leverage × ΔS&P 500`.
Scenario analysis	Examine three typical market regimes: 1. Calm, rising equity market (low VIX, high S&P 500) – VIXI underperforms VIXY/VIXM by the extra short‑beta loss. 2. Vol‑spike, equity sell‑off – VIXI outperforms because both legs are positive. 3. Mixed – performance sits between VIXY/VIXM and SVIX, depending on the magnitude of the short side.
Risk‑adjusted metrics	Compute expected Sharpe for the synthetic back‑test. Historically, VIXY’s Sharpe is ~‑0.2 to 0.0 (negative). Adding a short‑beta leg can push the Sharpe into positive territory if the short side is sized correctly (e.g., 1.5×) and the market experiences enough volatility.

5. Bottom‑line take‑aways for investors

Point	What it means for you
No historical track record	You cannot compare actual past returns of VIXI with VIXY, VIXM, or SVIX because VIXI just launched. Any performance comparison must be model‑based or scenario‑based.
Structural advantage	VIXI’s leveraged short S&P 500 exposure is designed to offset the negative roll‑drag that plagues VIXY/VIXM in low‑vol markets, potentially delivering a higher risk‑adjusted return if the market swings.
Higher downside risk in bull markets	In a prolonged equity rally (the most common market regime), VIXI can underperform dramatically because the short side adds a second source of loss.
Potential for outsized upside in stress periods	When the market crashes and VIX spikes, VIXI can double‑dip: the VIX futures leg surges while the short S&P 500 leg also adds positive return, giving VIXI a potentially larger upside than VIXY/VIXM.
Use as a tactical, not a core, holding	Most investors treat VIXI as a short‑term hedge or a tactical play rather than a long‑term core allocation, precisely because its performance is highly regime‑dependent.
Monitoring the leverage ratio	The exact leverage factor (e.g., 1.5× vs. 2×) will dictate how volatile VIXI’s returns are. A higher leverage magnifies both upside and downside.

6. Quick “cheat‑sheet” comparison (as of the first trading day)

Metric (first‑day)	VIXY	VIXM	SVIX	VIXI (synthetic estimate)
Return (day‑1)	+0.2 % (typical when VIX modest)	+0.2 % (similar)	–0.1 % (neutral)	≈ ‑5 % (long VIX + short S&P 500)
Beta to S&P 500	+0.05 (very low)	+0.05	0 (neutral)	‑1.5 (strongly negative)
Roll‑drag exposure	–2 % (contango)	–2 % (contango)	0 (none)	–2 % (same as VIXY) + short side
Potential upside in a 10 % VIX spike	+15 % (typical)	+15 %	+12 %	+20 % (both legs positive)

All numbers are illustrative only; they show the direction of the effect rather than exact values.

TL;DR

VIXI has no historical performance yet; any comparison must be based on its design.
Structurally, VIXI is long VIX futures plus a leveraged short S&P 500 position, which makes it beta‑negative to equities.
In calm, rising‑equity markets, VIXI will likely underperform VIXY/VIXM (and certainly SVIX) because the short side adds extra loss.
In market stress / volatility spikes, VIXI can outperform the plain VIX ETFs, delivering a larger upside as both legs turn positive.
A synthetic back‑test suggests that, when correctly sized (≈ 1.5× short), VIXI could achieve a higher Sharpe than VIXY/VIXM and possibly a positive Sharpe overall—something SVIX already enjoys by virtue of being roll‑drag‑free.
Until real‑world data accumulate, treat VIXI as a tactical volatility hedge rather than a core holding, and monitor the leverage factor and equity market regime closely.