Victoria Bay Asset Management said Thursday it has launched a new ETF that will reflect changes in the price of light sweet crude oil. The United States 12 Month Oil Fund, LP ETF, which will trade under the symbol USL, will track changes in percentage terms of the price of light sweet crude delivered to Cushing, Oklahoma, using changes in the average of the prices of twelve crude oil futures contracts -- namely the lead month and the following eleven months, with each month receiving equal weight.
"Having the portfolio consist of a number of contracts in the same commodity, but spread out across a year, is expected to produce different results for investors than if all the contracts were in the same month," John Hyland, the fund's director said. "This new approach would be impacted differently by the prices of the futures market and the effect of contango and backwardation." Current oil-price ETFs include Claymore MACROshares Oil Up Tradeable ETF (UCR), PowerShares DB Oil Fund ETF (NYSEARCA:DBO), and United States Oil Fund ETF (NYSEARCA:USO).
Additional Reading: Seeking Alpha's ETF Selector, full listing of Commodity ETFs and ETNs
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.