Highlights

  • Implied volatility, as measured by the Cboe® Volatility Index (the VIX®), rose in September as investors processed a laundry list of concerns.
  • Federal Open Market Committee Chair Powell noted that recent inflation and unemployment figures “all but met” the substantial progress tests needed to begin tapering of asset purchases.
  • Historical data shows that the equity market has been more susceptible to elevated volatility in response to adverse events during periods when the Fed was not actively purchasing assets.
  • Gateway believes investor anxiety over changes to Fed policies have the potential to keep implied volatility relatively elevated for the remainder of the year, creating opportunities for index option-based low volatility equity strategies.

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