VS Trust Reports Significant Financial Developments for Fiscal Year Ending December 31, 2024

VS Trust, a Delaware statutory trust formed in 2019, reported significant financial developments in its recent 10-K filing for the fiscal year ending December 31, 2024. The Trust operates two series: the -1x Short VIX Futures ETF (SVIX) and the 2x Long VIX Futures ETF (UVIX). For the year, SVIX's net assets increased to $300.1 million from $125.1 million in 2023, reflecting a 140% rise. Conversely, UVIX's net assets rose to $187.7 million from $69.7 million, marking a 169% increase. However, the per-share net asset value (NAV) for SVIX decreased by 32.8% to $25.39, while UVIX's NAV fell by 75.3% to $33.93.

The filing highlighted a substantial increase in shares outstanding for both funds, with SVIX's shares rising from 3.3 million to 11.8 million and UVIX's shares increasing from 507,498 to 5.5 million. This growth in share count was driven by the creation of 29.5 million shares for SVIX and 15.8 million for UVIX, while redemptions were also notable, with SVIX redeeming 20.9 million shares and UVIX redeeming 10.8 million shares. The Trust did not declare any distributions to shareholders during the fiscal year.

Strategically, the Trust underwent a significant change in its management structure, with Volatility Shares LLC taking over day-to-day portfolio management from Penserra Capital Management LLC as of September 16, 2024. This transition is expected to enhance operational efficiency and align management more closely with the Trust's investment objectives. The Trust's investment strategy focuses on achieving daily investment results that correspond to the performance of VIX futures contracts, which are subject to market volatility and other risks.

Operationally, the Trust reported a net investment income of $937,219 for SVIX and a net loss of $572,956 for UVIX in 2024. The net realized gains for SVIX were $16.5 million, while UVIX experienced a net realized loss of $47.6 million. The filing also noted that the Trust's management is actively monitoring market conditions and risks associated with its investment strategies, including counterparty risk and liquidity risk, particularly in the context of the ongoing volatility in the VIX futures market.

Looking ahead, the Trust remains focused on its investment objectives while navigating the complexities of the derivatives market. The management anticipates that the ongoing regulatory environment and market conditions will continue to influence the performance of the funds. The Trust's ability to adapt to these changes will be critical in achieving its investment goals and maintaining shareholder value.