What is a volatility ETF?

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In short
  • As of Nov 4, 2026, ETFIQ places 9 alternatives ETFs in volatility, among 90 alternatives ETFs, and ETFIQ tracks 26 equity hedged funds beside them.

In plain words

A volatility ETF takes positions tied to how much the market swings, usually through futures on a volatility index. When markets are calm, volatility is low, and when they fall fast, it jumps. These funds aim to gain when swings grow.

ETFIQ places 9 funds in volatility. The measures are weekly correlation and beta with the S&P 500, and what each fund did in the weeks the index fell. A volatility fund often has a negative correlation with stocks.

Holding volatility futures has a cost: they are rolled forward, and in calm markets the roll tends to lose value. Over long periods such funds can decay. ETFIQ shows the full-year weekly record, never a short window alone.

Questions

Why does a volatility fund decay?

Rolling futures in calm markets tends to cost value.

Is it correlated with stocks?

Often negatively. ETFIQ shows the weekly correlation over a year.

How many volatility funds are there?

9 as of Nov 4, 2026.

Not investment advice.

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ETFIQ, What is a volatility ETF?, data as of Nov 4, 2026. https://etfiq.com/learn/what-is-a-volatility-etf

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Free to use with attribution for ETFIQ’s data. Not investment advice.

Not investment advice. ETFIQ is independent and makes no recommendations.