Calmer Markets Lift ProShares VIX Mid-Term Futures ETF as U.S. Inflation Softens

A softer-than-expected pace in U.S. price gains has brought a noticeable relief to financial markets. Following the latest CPI release, inflation pressures appear to be easing a bit quicker than anticipated, which in turn helps the ProShares VIX Mid-Term Futures ETF by creating a more stable backdrop and reducing the near-term risk of sudden rate moves.

• Inflation rate: CPI rose 2.4% in January (forecast: 2.5%).
• Core rate: Core inflation at 2.5%—right in line with expectations.
• Bond market: The yield on the 2-year U.S. Treasury declined by 5 basis points.

The Bureau of Labor Statistics reported yesterday that the overall inflation rate came in at 2.4%, a touch below market estimates. The softer print promptly triggered a reaction in the bond market. The VIX index—commonly referred to as the “fear gauge”—traded intraday roughly between 20.0 and 22.4 points. In contrast, the futures held by the ProShares VIX Mid-Term Futures ETF remained comparatively steadier than front-month volatility products.

That steadiness stems from the fund’s strategic focus. It targets the middle portion of the volatility curve, specifically futures with maturities ranging from four to seven months. By concentrating on this segment, the ETF tends to be less reactive to short-lived market noise than products that merely track the next month.

Positioning and Roll Costs

Currently, the fund’s holdings are heavily tilted toward the middle of the 2026 horizon. As of February 12, the ETF carried substantial exposure in VIX futures for June (32.8%), July (33.5%), and August (30.3%).

Should investors sell immediately? Or is it worth buying ProShares VIX Mid-Term Futures ETF?

A primary influence on the fund’s performance is the shape of the futures curve. In quiet periods, near-term contracts frequently incur sizable roll losses due to contango. However, this effect is typically milder in the middle portion of the curve. The ongoing rebound in stocks has weighed on the prices of the futures held by the fund, but the relatively lower sensitivity of mid-term maturities helps cushion some of the downside pressure.

Outlook for Next Week

On February 18, the February futures contracts reach their final trading day, prompting a market reallocation. Whether the ProShares VIX Mid-Term Futures ETF can continue to function effectively as a hedge will depend on whether the inflation slowdown translates into a spell of lower realized volatility. A potential complicating factor remains the upcoming leadership change at the central bank, which could reintroduce uncertainty about future monetary policy.

Overall, the environment suggests a calmer backdrop for mid-term volatility products, even as investors watch inflation trends and monetary policy developments closely.