Structure of Crude Oil ETFs and ETNs Explained

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.

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