From an awesome new feature on Yahoo Finance called Market Pulse:
Showing posts with label ETF. Show all posts
Showing posts with label ETF. Show all posts
Monday, June 06, 2011
Sunday, February 27, 2011
USO vs Oil
We all know that the commodity ETFs tend to vastly underperform the commodities they are supposed to mimic. Wall Street games them as they roll contracts, the fund managers take their fees and not much is left for the ETF investor. UNG is famously the worst of all in this regard but USO is pretty horrid as well. Take a look at US ovewr the past three years:
When an ETF consistently performs so poorly compared with the commodity (see light crude chart below) one wonders why any one bothers to invest in it at all. There were over 150 million shares traded last week. Sure, there are probably tons of shorts in USO who hedge with crude futures but not everyone can be short. The shorts have to borrow from somewhere. This all begs the question, why do these "investment" instruments exist and who would want to own them? Is it all just short term investors who only care about the day to day performance and don't care about weekly under-performance as is clearly evident in these charts?
Disclosure: No position in these.
When an ETF consistently performs so poorly compared with the commodity (see light crude chart below) one wonders why any one bothers to invest in it at all. There were over 150 million shares traded last week. Sure, there are probably tons of shorts in USO who hedge with crude futures but not everyone can be short. The shorts have to borrow from somewhere. This all begs the question, why do these "investment" instruments exist and who would want to own them? Is it all just short term investors who only care about the day to day performance and don't care about weekly under-performance as is clearly evident in these charts?
Disclosure: No position in these.
Tuesday, February 26, 2008
Big Money Flows Out of Index ETFs
"In the past five trading days, U.S. equity exchange-traded funds redeemed $5 billion ($997 million daily). Futures-related ETFs redeemed $6 billion, non-futures-related ETFs issued $2.6 billion and short ETFs issued $1.1 billion. ...
The leading redeemers were Spiders (amex: SPY), which redeemed $3.7 billion (5.4% of assets); iShares Russell 2000 (amex: IWM), which redeemed $2.1 billion (25.4% of assets); and PowerShares QQQ (nasdaq: QQQQ), which redeemed $1.2 billion (7.8% of assets). ...
Based on the flows of ETFs, which are traded mostly by institutional investors, portfolio managers are either betting heavily on further market declines or using ETFs to hedge long positions in other investment vehicles. Futures-related ETFs redeemed $6.1 billion (3.7% of assets) in the past week and $11.5 billion (6.9% of assets) in the past two weeks.
By contrast, short ETFs issued $1.1 billion (10.1% of assets) in the past week and $1.4 billion (12.5% of assets) in the past two weeks. " -read the full article here
The leading redeemers were Spiders (amex: SPY), which redeemed $3.7 billion (5.4% of assets); iShares Russell 2000 (amex: IWM), which redeemed $2.1 billion (25.4% of assets); and PowerShares QQQ (nasdaq: QQQQ), which redeemed $1.2 billion (7.8% of assets). ...
Based on the flows of ETFs, which are traded mostly by institutional investors, portfolio managers are either betting heavily on further market declines or using ETFs to hedge long positions in other investment vehicles. Futures-related ETFs redeemed $6.1 billion (3.7% of assets) in the past week and $11.5 billion (6.9% of assets) in the past two weeks.
By contrast, short ETFs issued $1.1 billion (10.1% of assets) in the past week and $1.4 billion (12.5% of assets) in the past two weeks. " -read the full article here
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