Originally Posted by gatorfast
There is no time decay unless you are talking about options. There is however "decay" in the fact that these etf's are designed to track daily movement of the underlying index and are not designed to track long-term movement. Therefore if you hold these things over a period of time while the market moves up/down you will lose out on the decay of the daily repositioning.
In the case of VIX etfs that long vol, there is time decay because of the term structure in the VIX futures being in contango 70-80% of the time. But should the term structure be in backwardation then on the VIX etfs long vol have no time decay whatsoever. There is some tracking error built in over time, but that wouldn't the main reason for time decay in VIX etfs.
Not sure how other structures are set up