DNO should reflect the returns of the United States Crude Oil Fund (NYSEArca: USO) on a one-day basis, but the returns may diverge over the long-term because of compounding, according to IndexUniverse.
The new ETF’s main competitor is the PowerShares DB Crude Oil Short ETN (NYSEArca: SZO). SZO differs in that it owns out-month contracts instead of DNO’s front-month futures contract. SZO compounds its returns on a monthly basis.
For more stories on oil, visit our oil category.
Max Chen contributed to this article.