The Conversation (0)
Seeking Alpha explained the structure of crude oil exchange-traded funds (ETFs) and exchange-traded notes (ETNs).
Seeking Alpha explained the structure of crude oil exchange-traded funds (ETFs) and exchange-traded notes (ETNs).
As quoted in the market news:
The U.S. Oil Fund (USO), the largest and most liquid oil ETF, largely uses front-month contracts. This makes the fund more effective at capturing short-term moves, but it reduces the long-term efficiency. In contrast, the Teucrium WTI Crude Oil Fund (CRUD) spreads its investments evenly across three different maturities and rolls only four times a year – reducing the impact of contango and backwardation, but also reducing the correlation to spot prices.