Oil ETF overseer addresses the risks of investing in crude-based funds $USO $DBO (via ETFEdgeCNBC)
All this has made some in the industry question whether more education or warning should be required from companies offering ETF products that trade futures contracts., USO's top rival fund.
That "optimization process" involves a cost-effectiveness calculation on DBO's part. Before its futures contracts roll over, the fund determines which futures contract has the best "cost of carry," Bloom said. Here's where the transparency comes in. DBO shareholders know that the ETF will hold that March 2021 contract until about three weeks before it expires, then make that optimization calculation and roll it over, Bloom said.
Tom Lydon, CEO of ETF Trends and ETF Database, agreed that investors need to be aware of what they own when they buy shares of commodity ETFs.
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