“There are real opportunities to take positions outright or to modify longer term holdings in a broader commodity in their portfolio,” Hyman said.
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 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 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.