According to a press release, whereas the VEQTOR strategy dynamically allocates between equity, volatility and cash to provide broad equity market exposure with an implied volatility hedge, VEQTOR X is designed to complement an investor’s existing U.S. equity allocation. This is achieved by dynamically allocating between long exposure in the S&P 500 VIX Short-Term Futures Index and short exposure in the S&P 500, the announcement said.
The S&P Dynamic VEQTOR X Index is part of the S&P 500 Dynamic VEQTOR Index Series which allocates between equity and volatility based on the combination of realized and implied volatility trend decision variables. The allocations are evaluated on a daily basis. A stop-loss feature is also included to limit downside risk.