Wednesday, 28 January 2015

Oil ETFs in demand but beware of the contango trap

When looking at the performances of commodities, which are all traded as futures contracts requiring a regular roll, the true performance is often not shown correctly due to the inability of charts to take into account the positive or negative roll yield between an expiring contract and the next. In this we take a closer look at crude oil which has become a hot investment topic during the past few months.

Following the drop of over 50% in the price of crude oil since July, crude oil has increasingly been attracting interest from investors who see the current low prices as unsustainable in the long run. As a result, according to data from Bloomberg, we've seen net flows of more than four billion US dollars into energy ETFs since the beginning of November. The 40% collapse in the price since then has left many investors nursing losses but net-flows have remained positive. 
 
 
 

No comments:

Post a Comment