​Weekly: VIX ETF Investors Tested, Pensions Eye Liquid Alts

U.S. equity indices trended lower this week as investors traded cautiously leading up to this week’s Fed meeting, which saw the central bank walk a thin line keeping interest rates unchanged. Equity was also largely affected by weaker oil and soft economic data released this week (U.S. GDP only grew 0.5% on an annualized basis). Our coverage this week focuses on the increasing attractiveness of liquid alternative structures for small to mid-sized pensions that may not have the capability to trade options internally. We also look at the possible endgame scenario for VIX ETF investors and the distorting effects recent heavy inflow there have had on VIX term structure. In our Asia coverage, we look at how macro funds were positioning with upside structures on the Nikkei 225 as expectations increased that there would be policy action at the Bank of Japan meeting on Thursday to counter the deflationary impact of recent yen strength. In Europe, BNP is set to offer delta one, swaps and structured products on the FTSE Divest-Invest Developed 200 Index, which was launched on Thursday. Don’t forget our yearly Las Vegas conference is right around the corner. We’ll be at the ARIA Las Vegas over May 25-26. Visit http://eqderivatives.com/global-eqd to take a look at the agenda.