Filling the spot left by the delisting of the popular Credit Suisse VelocityShares leveraged oil exchange traded notes, ProShares has partnered with UBS ETRACS to launch their own triple leveraged long and short crude oil ETNs.
On Thursday, UBS and ProShares rolled out the UBS ETRACS – ProShares Daily 3x Long Crude ETN (NYSEArca: WTIU) and UBS ETRACS – ProShares Daily 3x Inverse Crude ETN (NYSEArca: WTID). WTIU has a 1.45% expense ratio and WTID has a 1.85% expense ratio.
“We are pleased to work with UBS, a leading provider of ETNs, to bring these new exchange traded products to market,” Steve Cohen, managing director of ProFunds Distributors, Inc., the marketing agent for the ETNs, said in a note. “These ETNs offer investors new tools to manage risk and potentially enhance returns.”
The new ETNs will help fill in a void left by the delisting of popular VelocityShares 3x Long Crude ETN (NYSEArca: UWTI) and VelocityShares 3x Inverse Crude (NYSEArca: DWTI). Credit Suisse AG, the underwriting bank for the two ETNs, delisted and suspended further issuance of the two leveraged ETNs effective December 9. The two ETNs remain outstanding, but they will only trade on an over-the-counter basis.
UWTI and DWTI have been go-to, easy-to-use plays to capitalize on turns in West Texas Intermediate crude oil prices. Now, more aggressive traders may turn to the newly launched WTIU and WTID to gain triple leveraged exposure to the ups and downs in West Texas Intermediate crude oil prices.
The two new WTIU and WTID try to reflect the 300% or -300% daily performance of the Bloomberg WTI Crude Oil Subindex ER, respectively, which is comprised of WTI futures contracts and rolls into other WTI futures contracts with later expirations every other month to contracts with two months longer in maturity to avoid physical delivery of the commodity.
WTIU and WTID will be going up against Citigroup’s VelocityShares 3X Long Crude Oil ETN (NYSEArca: UWT) and the VelocityShares 3X Inverse Crude Oil ETN (NYSEArca: DWT), two copies of the original UWTI and DWTI that were added the day the two originals were moved into the OTC market.
For more information on new fund products, visit our new ETFs category.