, which will begin trading on The Nasdaq Stock Market on Tuesday, May 19, 2015. The funds will track the CBOE Volatility Index (VIX).
“We are delighted to partner with Nasdaq as we launch our first funds for the ETF market,” said Jack Fonss, Chief Executive Officer and Co-Founder of AccuShares. “The reach and technology capabilities that Nasdaq offers will help us deliver on our goal of democratizing ‘spot’ exposure for ETF investors.”
With VXUP, investors can seek to capitalize on increases in the VIX, and with VXDN, can seek to capitalize on decreases in the VIX. Unlike other exchange-traded VIX funds, the AccuShares Spot CBOE VIX ETF provides straightforward tax reporting through Form 1099s. Its transparent pricing and product architecture provide predictable cost of ownership, eliminating the asset complexities and term structure associated with other exchange-traded offerings.
“We are thrilled to list the first AccuShares ETFs and we appreciate AccuShares’ confidence in choosing the Nasdaq marketplace to list and trade ETFs,” said Jeff McCarthy, Vice President, Head of U.S. ETP Listings at Nasdaq. “Nasdaq generates opportunities for issuers to access new markets and deliver new concepts that change the way the industry develops, manages and applies ETFs. The new innovative funds, VXUP and VXDN, offer investors unique capabilities to access spot indices.”
Nasdaq operates an efficient platform for successfully introducing a product suite into one of the single largest pools of liquidity, including market participants that represent a full spectrum of investors. ETF issuers benefit from an end-to-end solution that provides ongoing product support at every level including index licensing, listings opportunities, data offerings and trading services. As the home to some of the world’s most innovative ventures, Nasdaq generates opportunities for issuers to access new markets and deliver new concepts that change the way the industry develops, manages and applies ETFs.
Founded in 2011, AccuShares Investment Management, LLC, (www.accushares.com) seeks to be an innovative, financial services firm offering exchange traded products (ETP) shares that provide direct access to “spot” indices in key alternative asset classes. AccuShares ETFs offer investors the ability to trade both Up and Down shares, enabling them to potentially take advantage of opportunity in any market. Its patent-pending technology and “direct-to-index” quantitative design seeks to reduce overall expenses while also attempting to both simplify tax reporting and provide investors with transparent cost of ownership and transparency in returns.
About CBOE Volatility Index:
The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500® stock index option prices. Since its introduction in 1993, the VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility. For more information, please visit: http://www.cboe.com/micro/VIX/vixintro.aspx
Nasdaq (Nasdaq:NDAQ) is a leading provider of trading, clearing, exchange technology, listing, information and public company services across six continents. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today’s global capital markets. As the creator of the world’s first electronic stock market, its technology powers more than 70 marketplaces in 50 countries, and 1 in 10 of the world’s securities transactions. Nasdaq is home to more than 3,500 listed companies with a market value of approximately $9.5 trillion and more than 10,000 corporate clients. To learn more, visit: nasdaq.com/ambition or business.nasdaq.com.
Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about Nasdaq and its products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq’s control. These factors include, but are not limited to factors detailed in Nasdaq’s annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.
Nothing contained herein should be construed as investment advice from Nasdaq, either on behalf of a particular financial product or an overall investment strategy. Nasdaq makes no recommendation to buy or sell any financial product or any representation about the financial condition of any company or fund. Investors should undertake their own due diligence and carefully evaluate financial products before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.
Exposure to the expected price volatility of the S&P 500 Index involves a significant degree of risk and may not be appropriate for all investors. Moreover, shares of the fund are intended for sophisticated, professional and institutional investors.
Unlike other exchange traded products, the fund will engage principally in cash distributions and potentially paired share distributions to deliver to the shareholders the economic exposure to the fund’s underlying index, the CBOE Volatility Index. Such distributions may not represent any income or gains on the fund’s eligible assets and may represent a return of shareholder’s capital. Each fund will issue its shares in offsetting pairs, where one constituent of the pair is positively linked to the fund’s underlying index (“Up Shares”) and the other constituent is negatively linked to the fund’s underlying index (“Down Shares”). Therefore, the fund will only issue, distribute, maintain and redeem equal quantities of Up and Down shares at all times.
Key Risk Factors:
The Funds are not intended to be used as long-term passive investment vehicles and should be used by investors who understand the risks of the volatility market. By purchasing the Down Shares, investors should have an expectation that the Underlying Index will decrease during the Measurement Period. If the Underlying Index increases during the Measurement Period, investors in the Down Shares will experience a significant loss and could lose their entire investment. The Funds are not appropriate for you if you do not intend to actively monitor and manage your holdings in the Funds before and immediately following each Fund distribution date.
Investing in the Fund involves substantial risk and high volatility, including possible loss of entire principal. Receipt of distributions of cash or shares will reduce an investor’s opportunity for gains in subsequent periods. Special Distributions will alter the timing of distributions to investors and reduce an investor’s opportunity for gains in subsequent periods. A Corrective Distribution will eliminate an investor’s opportunity for gains relating to the Underlying Index if an investor fails to rebalance his/her investments. Net income distributions may not occur. Decreases in Class Values per Share from distributions and/or net losses may reduce Class Values per Share leading to an adverse effect on the liquidity of the market for the Fund’s Shares and may deplete the Fund’s assets. Additionally, a less liquid market for the fund’s shares would increase the difficulty for investors seeking to acquire or sell fund shares at any price. Moreover, a significant decline in the fund’s class values may cause the sponsor to terminate the fund if its continued operation would be uneconomical.
AccuShares Commodities Trust I is a Delaware statutory trust organized by AccuShares Management LLC, the trust’s sponsor, into separate Fund series. Neither the Fund nor the Trust is an investment company under the Investment Company Act of 1940 or is subject to regulation under the Commodities Exchange Act or by the Commodity Futures Trading Commission and investors in the Fund are not afforded protection under such laws and regulations. Each Fund’s shares represent fractional undivided interests in and ownership of that Fund only. Each Fund will offer its shares on a continuous basis and be listed on the Nasdaq Stock Market.
Distributions and Exposure to Underlying Index:
Exposure to changes in an Underlying Index will be achieved through the allocation of the Fund’s liquidation value to each of its share classes and the resulting distribution to Fund shareholders of cash or cash and paired Up and Down Shares on prescribed distribution dates. A Fund’s Up Shares will be entitled to a distribution when the Fund’s Underlying Index has increased as of specified dates (“Regular Distributions”) or by 75% (“Special Distributions”). Similarly, a Fund’s Down Shares will be entitled to a distribution when the Fund’s Underlying Index has decreased as of specified dates (“Regular Distributions”) or by 75% (“Special Distributions”). Any Regular or Special Distribution will not take into account any index change of more than 90%, in either direction since the previous distribution date. Regular and Special Distributions are expected to be made principally in cash, though the sponsor reserves the right to make all or any part of any such distribution in paired shares, especially where further cash distributions would have an adverse effect on the liquidity of the market for the Fund’s shares. After the first six months of Fund share trading, such distributions will be made in paired shares if Fund assets are $25 million or less. Investors who receive distributions in the form of paired shares should determine whether the distributed shares have altered the intended exposure. In the event of a paired share distribution, shares will be received that provide the opposite exposure, and as a result, an investor might consider selling the unwanted shares and purchasing the desired share class. Sales and purchases of shares to maintain a desired exposure are subject to regular commissions and transaction costs.
The share class having an adverse experience from Underlying Index changes will receive no Regular or Special Distribution and will experience dilution in value caused by the distribution to the opposing share class. Corrective distributions of shares (“Corrective Distributions”) may occur if the Fund’s share classes’ exchange trading prices deviate persistently from the value per share representing their share class’ relative portion of the Fund’s liquidation value (“Class Value per Share”). See “Investment Objectives,” “Distributions and Distribution Dates,” and “Description of the Shares & Certain Terms of the Trust Agreement.”
Each Fund will hold only cash, short-dated U.S. Treasuries or eligible repurchases agreements collateralized by U.S. Treasuries. The Fund will not invest in commodities, futures, swaps, or other derivatives. The Fund does not directly invest in the index, or in the securities it tracks.
The Funds have been designed to be utilized by investors who are prepared to reassess their holding of the shares at least as frequently as each Distribution Date. Investors in a Fund who wish to maintain a maximum exposure, a targeted absolute exposure, or a targeted relative exposure to such Fund’s Underlying Index over multiple Distribution Dates should reassess their positions following all cash, share and Net Income Distributions, and all Fund resets relating to the Share Index Factors. The Funds will not compound investor gains or otherwise rebalance investor positions to maximize investor exposure. The Funds are designed to make Regular Distributions of cash and in some cases shares to facilitate regular distribution of investor gains and to promote a deliberate and regular reassessment by investors of their investment in the Funds.
Investors who hold shares over one or more consecutive Distribution Dates without reassessment of their Fund share portfolio may experience decreased exposure to the Fund’s Underlying Index as well as a reduced opportunity for gain and loss.
Material should be preceded or accompanied by a prospectus, downloaded here.
The Underlying Index is a product of The Chicago Board Options Exchange Incorporated (“CBOE”) which is licensed by S&P Dow Jones Indices LLC (“SPDJI”) to AccuShares Management LLC in connection with the AccuShares Spot CBOE VIX Fund. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); CBOE®, Chicago Board Options Exchange®, CBOE Volatility Index® and VIX® are registered trademarks of the Chicago Board Options Exchange, Incorporated (“CBOE”); and, these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by AccuShares Management LLC. AccuShares Spot CBOE VIX Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates or their third party licensors (including CBOE) and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the CBOE Volatility Index.
Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC, a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively “S&P Dow Jones Indices”) do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.
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