Just looked back at XVIX's first six months and there's actually some interesting stuff worth digging into here. For those not familiar, this UBS ETN is basically a bet on the shape of the VIX futures curve rather than volatility itself. It goes long on midterm VIX futures while shorting the front-month contracts, which is a pretty specific play.

So how'd it actually perform? I compared XVIX against a few other absolute-return type funds like GTAA, DBV, and RALS. Returns-wise, it came in third, which is decent but not spectacular. Volatility was a bit better though—second place when you look at standard deviation. But here's where it gets interesting: the correlation numbers are where XVIX really stands out.

I ran it against SPY and AGG as proxies for stocks and bonds. XVIX basically showed almost no correlation with either. That's actually the whole point—this thing is designed to move independently from traditional markets. Even compared to VXX, the straight VIX play, XVIX showed near-zero correlation. And that makes sense because XVIX is all about term structure dynamics, not raw volatility moves.

Now for the practical stuff. The fee is 0.85 percent, which isn't cheap but sits right in line with comparable products. There are some quirks though. First, tax treatment is murky—you might get long-term capital gains treatment or ordinary income rates, nobody really knows until you sell. Second, it's an ETN structure, so there's counterparty risk with UBS. If they went under, holders would be in a bad spot. Third, no income generation here, so you're purely betting on price appreciation.

One more thing: this is thinly traded, so use limit orders. Market orders on XVIX will eat your lunch.

Bottom line? XVIX actually delivers on that "absolute returns" promise—the correlation with stocks and bonds validates that part. The real question is whether you can actually make money on the term structure bet itself. For now, it's doing what it's supposed to do, just needs the returns to catch up.