Well I’m back in Canada for the Christmas holidays and right out of the gates we got a little bit of snow this morning which was a nice treat.  Hopefully there is more to come and it can be a truly white Christmas.

Keeping with the Canadian theme today I wanted to direct this daily blog to all my fellow Canadians out there.  There is nothing wrong with trading the XIV, SVXY whenever our strategies are in those positions and most people will do just that.  They are just basic ETPs and should be easily accessible for everybody from virtually any online broker as well as in any type of account including tax sheltered types.

* However if you do want to keep your purchases in Canadian dollars there is a potential alternative.

HVI  –  BetaPro S&P 500 VIX ST Futures Daily Inverse ETF

Morningstar link for more information:  http://beta.morningstar.com/etfs/XTSE/HVI/quote.html

HVI is virtually the same as XIV / SVXY except it is Canadian so for anybody who’s personal financial situation makes it easier to keep money in Canadian dollars this is a decent option.  A couple of notes:

1)  The return is slightly less than XIV / SVXY, but when fees and exchange rates etc are included I would imagine the difference is going to be negligible in the long-run.

2)  Volume is quite a bit lower than the other more popular US offerings, however unless you’re trading a very large account size I don’t think it’s going to be a problem.  I’ve executed trades on HVI many times  (still do in one of my accounts)  and I’ve never had an issue with slippage.

HVI quote from RBC Direct Investing  (30 minutes after open)

* I am not exercising this trade, it’s just for demonstration *

The bid / ask spread is decent and the volume should be just fine for most investors.  I personally use “market” orders when I execute my trades with HVI, but if you are worried about the lower volume you can experiment with “limit” orders vs market orders at first and see how it goes.

For the following strategies, HVI can be used instead:

VTS Tactical Volatility Strategy  (HVI instead of XIV)
VTS Aggressive Vol Strategy  (HVI instead of SVXY)

* There is no Canadian equivalent for the ZIV yet, and even if there was I doubt the volume would be high enough to make it a viable option  (conservative investing is out of style these days)  so for anyone trading the VTS Conservative Vol Strategy, it’s best to just stick to ZIV.

Most people will stick to the more popular XIV / SVXY but I just wanted to bring the HVI to the attention of my fellow Canadians in case it better suits your needs.


Current VTS Total Portfolio Solution Allocations

25% VTS Tactical Volatility Strategy

50% VTS Tactical Balanced Strategy

25% VTS Iron Condor Strategy

VTS Aggressive Vol Strategy  –  Optional replacement for higher risk tolerance investors

VTS Conservative Vol Strategy  –  Optional replacement for lower risk tolerance investors


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