Volatility Bargain Alert: Goldman Sachs Analyst Asserts VIX Is Priced Too Low For Economic Realities
Portfolio Pulse from Piero Cingari
Goldman Sachs analysts believe that the CBOE Volatility Index (VIX) is trading at price levels significantly lower than what the broader economic context would suggest. The VIX is currently at 13.8, about 6 points below the level implied by the growth and inflation environment. Despite a turbulent period that briefly propelled the VIX to a high of 31 during the regional-bank failures in March, volatility has since decreased, except for a brief uptick in August. This year’s 35% decline in the VIX is the second-largest annual drop since the 2009 financial crisis. ETFs such as the ProShares Trust VIX Short-Term Futures ETF (VIXY), the ProShares Trust VIX Mid-Term Futures ETF (VIXM), and the ProShares Trust Ultra VIX Short-Term Futures ETF (UVXY) provide opportunities to participate in the VIX’s movements.
September 12, 2023 | 5:03 pm
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POSITIVE IMPACT
The ProShares Trust Ultra VIX Short-Term Futures ETF (UVXY) could be impacted by the perceived undervaluation of the VIX. If the VIX increases, UVXY could see a positive impact.
The UVXY ETF is directly tied to the performance of the VIX. If the VIX is indeed undervalued and increases, UVXY could see a positive impact.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The ProShares Trust VIX Mid-Term Futures ETF (VIXM) could be impacted by the perceived undervaluation of the VIX. If the VIX increases, VIXM could see a positive impact.
The VIXM ETF is directly tied to the performance of the VIX. If the VIX is indeed undervalued and increases, VIXM could see a positive impact.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The ProShares Trust VIX Short-Term Futures ETF (VIXY) could be impacted by the perceived undervaluation of the VIX. If the VIX increases, VIXY could see a positive impact.
The VIXY ETF is directly tied to the performance of the VIX. If the VIX is indeed undervalued and increases, VIXY could see a positive impact.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80