Volatility ETFs Crash as Market Fears Drop

Volatility ETFs Crash as Market Fears Drop
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The U.S. stock market saw a soft start to the year on rising fears of a faster QE taper, the subsequent withdrawal of cheap dollars, as well as the emerging market lull. But the scenario took a sharp turn with downbeat job, retail and manufacturing data, which sent markets tumbling (read: 3 Low Risk ETFs for a Stormy Market).

The data once again spurred the possibilities of a slower QE wrap-up and the market once again turned its attention toward the safer assets. As a result, the volatility index (the VIX) – often regarded as a fear gauge level, which touched a 13-month high of 21.4 earlier this month thanks to the stock slump – has been bleeding heavily while the S&P index gained modestly during the same time frame.

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