What does the future hold for energy investing crude oil exchange traded funds? Geopolitical expert, frequent CNBC contributor and ex-CIA analyst Helima Croft shares insights ahead of the May OPEC meeting.
On the upcoming webcast, Drill Into the Future of Oil With Wall Street’s Top Geopolitical Analyst, Helima Croft, Managing Director and Global Head of Commodity Strategy Global Research at RBC Capital Markets, and Simeon Hyman, Head of Investment Strategy at ProShares, will touch upon various factors that could affect the crude oil prices, including the Organization of Petroleum Exporting Countries and policy changes, and look to investment opportunities to potentially capitalize on the energy market.
Investors interested in the oil market can consider ProShares’ recently launched ProShares K-1 Free Crude Oil Strategy ETF (BATS: OILK). OILK is an actively managed fund that provides exposure to the West Texas Intermediate crude oil futures market. The fund will include WTI crude oil futures with the three nearest expiration dates, or the front, second and third month contracts, which may help diminish the negative effects of contango.
The oil ETF will also gain exposure to WTI crude oil futures through its ProShares Cayman Crude Oil Strategy Portfolio, a wholly-owned subsidiary of the fund. Since OILK is not structured as a commodities partnership that directly utilizes futures contracts, the new active ETF will not require investors to fill out a K-1 – most commodity futures-based ETFs require K-1s. Instead, investors would only need to fill out tax reporting information on 1099 forms.
ProShares has also recently come out with the ProShares rolled out the ProShares UltraPro 3x Crude Oil ETF (NYSEArca: OILU) and ProShares UltraPro 3x Short Crude Oil ETF (NYSEArca: OILD), the first and only triple leveraged and inverse crude oil-related ETFs, allowing energy traders to obtain geared exposure to the commodity through the efficient ETF investment vehicle.
OILU and OILD will try to reflect the daily performance that is 3x and -3x, respectively, of the underlying Bloomberg WTI Crude Oil Subindex. The two ETFs will gain exposure to the benchmark by investing in listed futures contracts for West Texas Intermediate sweet, light crude oil futures contracts. The ETFs will also utilize a mathematical approach to investing that determines the type, quantity and mix of investment positions the provider believes should produce daily returns consistent with their 3x or -3x objective.
Financial advisors who are interested in learning more about the crude oil markets can register for the Wednesday, April 12 webcast here.