A Different Kind of Crude Oil ETF From U.S. Commodity Funds
Michael Johnston submits:United States Commodity Funds, the company behind several of the largest futures-based exchange-traded commodity products, added a new fund to its lineup this week. The United States Brent Oil Fund (BNO) began trading on Wednesday, becoming the eighth product offered by USCF. The objective of BNO is for the daily changes in percentage terms of net asset value to reflect the daily changes in percentage terms of the spot price of Brent crude oil as measured by the changes in the price of the futures contract on Brent crude oil as traded on the ICE Futures Exchange. Brent oil might seem like a strange commodity to make the focus of an ETF, but it’s a more important global resource than most investors realize. The Brent crude oil contract, which trades in U.S. dollars in London, is the second most liquid commodity futures contract in the world; it comes in behind only West Texas Intermediate (WTI) and ahead of gold and natural gas. The largest ETF focusing on WTI futures contracts, the United States Oil Fund (USO), currently has about $1.8 billion in assets. The largest futures-based gold (DGP) and natural gas (UNG) ETFs have assets of about $450 million and $2.8 billion, respectively. So it’s reasonable for USCF to hope that BNO will see decent demand from investors. BNO began trading Wednesday at a price of $50 per share with 200,000 shares outstanding.Complete Story »
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