Happy VIX-tivus!

Before I forget, I would like to wish a Happy Festivus to all. Or, as we say in volatility world: Happy VIX-tivus! And that, of course, means it's the time of year when we gather around the VIX-tivus Pole and air our grievances about how all our family volatility exchange-traded funds (ETF) have disappointed us all!

So, let me start with mine: the VelocityShares Daily 2x VIX Short-Term ETN (NYSEARCA:TVIX). The CBOE Volatility Index (VIX) is up on the year. TVIX tracks two times iPath S&P 500 VIX Short-Term Futures ETN (VXX). And it makes VXX look like a champ, as TVIX has pared two-thirds of its value in 2014.

Even by volatility ETF standards, that's shockingly bad. But, I suppose it makes sense. VXX itself has lost one-third of its value, so it's essentially in line. But … just wow. It's almost back to all-time lows not much more than a week beyond a nice volatility spike!

Let me throw another ETF out there that disappointed: the VelocityShares Daily Inverse VIX Short-Term ETN (XIV). XIV tracks the inverse of VXX. Again, VXX dropped about 33% in 2014, yet XIV has only gained a shade more than 1%. That's a little more underperformance than normal over the course of a year. But, it makes some sense, thanks to the exceptionally choppy nature of volatility this year.

As always, compounding kills tracking ETFs. Any churn over any time frame causes a drop in value. So, unless VXX moves in one direction, XIV will underperform. To max out your bets against VXX, you have to short it and incur borrowing costs (low or non-existent most of the year) and risk being short a theoretically open-ended vehicle.

Well, there are my grievances. Here are some of yours:

@agwarner Realized vol at 4%, that didn't last too long. #vixtivus

— Eric Pomerantz (@EricP) December 23, 2014

Hey, we got down to 3! Feels like we're headed there again by New Year's.

@agwarner Vix-tivus pole is never straight

— Steve Provost (@AlphaBetaBanjo) December 23, 2014

It also ends in some sort of singularity -- at least, that's what I learned in VIX-stronomy way back when.

@agwarner My 2015 VIX prediction: Most people who make VIX predictions will be wrong! #AddingValue

— VIX For The People (@vixforthepeople) December 23, 2014

I predict I will make more wrong VIX predictions than anyone!

@vixforthepeople @agwarner They have a 50/50 chance of being right, though there's only a 10 percent chance of that.

— Matt Thompson, CFA (@dynamicvol) December 23, 2014

Quick timeout to remember Leslie Nielson and Enrico Pallazzo. Anyway …

@agwarner grievance: there aren't always shares available to short

— Jim Hutchinson (@UpbeatInvesting) December 23, 2014

It does become a crowded trade. But, it's improved over the years, there was a time you had to pay up big-time to short VXX. And finally:

@agwarner @UPBOptionMil Its a VIX - tivus for the RES - tivus

— Option Millionaires (@OMillionaires) December 23, 2014

Indeed. Best holiday wishes to all!

Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.