Research brief 033

13.05% Annualized From Five ETFs—Can VIX Improve a Monthly Rotation?

A simple monthly allocation rule beat its fixed-lookback control in our house test. The question is whether volatility timing deserves the credit.

The idea worth investigating

13.05% annualized after modeled trading costs, using five ETFs and a monthly decision. Our VIX-adaptive rotation finished ahead of the fixed-lookback version, which returned 11.51%.

FPM historical house adaptation, July 31, 2017–June 30, 2026, with returns accruing from August 2017. Both figures are CAGRs after 10bp per dollar traded and use information available one session before execution.

Completed simulation, not live returns or an exact source replication. The adaptive strategy had a 21.70% maximum drawdown, and its incremental advantage remains statistically uncertain.

Paid analysis on Substack

See what changes the investment case.

The headline is the starting point. The subscriber analysis takes you through:

  • The VIX thresholds, momentum windows and five-ETF decision tree
  • Top-one versus top-two results with matching timing and costs
  • The uncertainty test and a practical plan for tracking live decisions
Read the paid analysis ↗

AI assists curation and drafting. The research status distinguishes paper reviews from house tests. Read our research approach.

New research briefs by email, free

Find your next research question.

Get the finding that caught our attention, the original paper, and the practical question it raises. Full reviews and house-test details are available with a paid subscription.