New ETFs track oil prices without futures

Investors can bet on the price of oil going up or down or hedge other investments with the securities.
JUL 02, 2008
MacroMarkets today introduced two American Stock Exchange-traded funds that capture the commodity performance of oil without making investments in oil or futures contracts, said Sam Masucci, president and CEO and co-founder of the firm, with Robert Shiller, professor of economics at Yale University. Investors can bet on the price of oil going up or down or hedge other investments with the securities, he said. The two ETFs, MacroShares Oil Up and Oil Down, started to trade with $20 million in seed capital from pension funds and other institutional investors, which Mr. Masucci declined to identify. MacroMarkets will transfer assets dollar-for-dollar between the Up and Down securities to replicate the change in the benchmark price of NYMEX light sweet crude oil, he said. MacroShares holds about 75% of its assets in 90-day Treasury bills and the rest in other short-term instruments. State Street Bank is custodian of the assets. Investors in the ETFs, trading under the symbols OUY and DOY, respectively, receive all the interest earned from the short-term investments, minus MacroShares expense, every three months, Mr. Masucci said. The securities’ structure avoids concern in Congress about commodity futures investors driving up oil price, because the securities invest only in short-term money-market instruments, not futures, Mr. Masucci said.

Latest News

Ameriprise, advisor on the hook to pay Edward Jones $4.7 million in trade secrets lawsuit.
Ameriprise, advisor on the hook to pay Edward Jones $4.7 million in trade secrets lawsuit.

In a constant fight over control of clients, the financial advice industry has a long history of such allegations and disputes.

Powering retirement for Wall Street
Powering retirement for Wall Street

Retirement fintech Vestwell has hit profitability and $200 million in annual recurring revenue, powering savings programs for 750,000 employers and Wall Street’s biggest firms

Advisor moves: LPL welcomes back RayJay advisor trio in Texas
Advisor moves: LPL welcomes back RayJay advisor trio in Texas

Meanwhile, &Partners has drawn another Wells Fargo team based in Missouri, while an experienced South Carolina advisor has returned to Cetera from LPL.

FINRA fines Vanguard $950,000 over decade of cost basis errors
FINRA fines Vanguard $950,000 over decade of cost basis errors

Faulty Forms 1099 and account statements reportedly left some Vanguard brokerage customers overpaying or underpaying taxes for over a decade.

More ETFs, more opportunity, more homework
More ETFs, more opportunity, more homework

The democratization of ETFs cuts both ways

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains