To me, the fact that VIXH is not constantly hedged is a significant drawback bordering on absurdity. I am not a career statistician, but I think this makes VIXH vulnerable to future black swan events rather than protecting investors from them.
Additionally, a black swan event is by definition a "surprise" event. To claim that the element of surprise, and the associated portfolio impact, are nonexistent much of the time based on only five observations over 25 years tends to stretch statistical credibility.
Although the official expense ratio is 0.60%, the actual cost to shareholders is likely to be much higher. The fund may have to sell a portion of each of its 500 stocks every month in order to free up cash for additional VIX call options. It also intends to reinvest every dividend received on those 500 stocks.The transaction costs (brokerage fees and slippage) on up to 6,000 transactions per year (much more if you include dividend reinvestments) could have a severe performance impact. Hopefully, the management team has considered the cost of implementing this strategy with individual stocks versus using Vanguard S&P 500 (VOO) for the equity exposure. Potential investors of VIXH should compare to
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