Tag: commodity etf

Oil ETF List

After gold ETFs, I thought I’d create an oil ETF list too. So, here is a comprehensive list of oil ETFs.

Oil ETF that own Oil Stocks

1. Oil Service HOLDRS T (OIH): The OIH ETF owns stocks of companies in the oil industry. These companies are engaged in provided drilling, well site management and other related products and services.

2. iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (IEO): This oil ETF owns the stocks companies in the Dow Jones US Oil and Gas Index. The top holding of this ETF is Occidental Petroleum Corp. You can see the other holdings at this link.

3. iShares Dow Jones US Oil Equipment  & Services (IEZ): This ETF is not exactly an oil ETF but it holds the stocks of companies that manufacture oil equipment or provide oil services. The top holding of this ETF is Schlumberger Co. Ltd. You can click here to view the top holdings of this ETF.

4. SPDR S&P Oil & Gas Equipment & Services (XES): This oil ETF is like IEZ and its top holding is Schlumberger as well. You can click here to view all the top holdings.

5. SPDR S&P Oil & Gas Exploration & Production (XOP): This oil ETF is owns stock in the oil and gas exploration business. Its top holding in Exxon Mobil and you can see its top holdings here.

Oil ETF that own Future Contracts

6. United States Oil (USO): USO is one of the more popular oil ETFs, which tracks the price of West Texas Intermediate light, sweet crude. The ETF invests in future contracts and options in order to track these prices.

7. United States Heating Oil (UHN): This oil ETF invests in future contracts and options in order to track the prices of heating oil delivered at the New York harbor

8. United States 12 Month Oil (USL): This oil ETF tracks the changes to the light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the average of the prices of 12 Futures Contracts on crude oil. It does that by owning oil futures contracts and other oil related futures, forwards, and swap contracts.

9. iPath S&P GSCI Crude Oil Total Return Index ETN (OIL): This is an ETN and not a ETF, which tracks the return of West Texas Intermediate (WTI) crude oil futures contract.

10. PowerShares DB Crude Oil Long ETN (OLO): This ETN is designed to track the return of Deutsche Bank Liquid Commodity Index, which in turn tracks crude oil futures contracts and US 3 month T Bill contracts.

Short Oil ETF

11. PowerShares DB Crude Oil Short ETN (SZO): This ETN will go up when oil goes down and will track the inverse of Deutsche Bank Liquid Commodity Index.

12. PowerShares DB Crude Oil Double Short Exchange Traded Note (DTO): This ETN will go up twice as much as the price of oil goes down, as measured by the Deutsche Bank Liquid Commodity Index

13. ProShares UltraShort DJ-UBS Crude Oil (SCO): This fund seeks daily investment results, that correspond to twice the opposite of the daily performance of The Dow Jones-UBS Crude Oil Sub-Index.

Double Oil ETF

14. The PowerShares DB Crude Oil Double Long ETN (DXO): This ETN goes up twice as much as the price of oil, as reflected by the Deutsche Bank Liquid Commodity Index.

15. ProShares Ultra DJ-UBS Crude Oil (UCO): This ETF seeks daily investment results that correspond to twice the daily performance of the Dow Jones-UBS Crude Oil Sub-Index.

Terminated Oil ETF

I came across the fact that two oil ETFs – Macroshares Up and Macroshares Down have been terminated because their deposits dwindled to less than 50 million dollars, and I thought a few people might be interested in knowing this too (actually I had spent time researching it and didn’t want that effort to go waste).

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Silver ETF: iShares Silver Trust (SLV)

iShares Silver Trust (SLV) is the world’s larget silver ETF backed by physical stock of silver bullion.  It trades on the NYSE Arca and is a good option for investors looking to invest in silver by means of an ETF. The sponsor of iShares Silver Trust (SLV) is Barclays Bank.

Backed by Physical Silver Bullion

As on March 23rd the iShares Silver Trust (SLV) held 8,180.44 tonnes of silver. This stock of silver is stored at SLV’s custodian — JP Morgan Chase.

Some commodity funds not only hold the underlying commodity, but, on top of that — trade on the futures contracts of that commodity on exchanges like COMEX. SLV doesn’t do this. SLV takes delivery of physical silver, which complies with London Bullion Market Association (LBMA) silver delivery rules.

There are other silver funds  which take positions in silver by buying stock of silver mining companies. SLV doesn’t do that either.

Passive Investment Vehicle

This means that SLV is a passive investment vehicle and the price of the fund moves in tandem with silver prices. There are no fancy hedging or other active management techniques used by this silver ETF. The lack of active management means reduced expenses and fees.

SLV Price Movement

Here is a look at how the SLV ETF moved since September 2008. There was a 10:1 split on 21st September, so I am not including the chart which includes prices before that date.

slv1

Silver Mining vs Supply

In the past seven years — silver mining has increased from 591 million ounces in 2000 to 670.6 million ounces in 2007, which is a growth of 13% at a CAGR of about 1.82%

At the same time the total demand has risen from 824 million ounces to 894.5 million ounces, which is an increase of 8.5% at a CAGR of 1.18%

The gap between total demand and total supply is matched by:

  • Net Government Sales
  • Old Silver Scrap
  • Producer Hedging
  • Implied Net Investment / Disinvestment

Source: World Silver Survey 2008

Silver Demand Segments

While silver is generally thought of as a precious metal, its industrial use exceeds its use in jewelery and coins. Here is a break-up of 2007 silver usage segments:

silver-usage1

This chart shows that the demand for physical silver is likely to be more stable than other precious metals like gold, which have a large component of discretionary spending built into their demand.

Source: World Silver Survey 2008

Silver Rally

Precious metals like gold and silver are getting increasingly popular because they are seen as effective hedges against stock market downturns. Like gold, silver is considered a good hedge against the stock market, as investors flock to safety in times of uncertainty.

The quantitative easing that the Fed is currently employing is expected to result in massive inflation and fall in the value of dollar. This is another reason precious metals like silver are gaining in popularity and seeing a rally.

Conclusion

The iShares Silver Trust (SLV) ETF is a good option for anyone who wants to invest in silver, but is not interested in holding huge quantities of physical silver. However, the prices of gold and silver have already gone up quite considerably and given the enormous interest in these metals lately — this may just be where the next bubble is forming.

Disclosure: At the time of writing I don’t hold any positions in SLV.

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