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ProShares, UBS Launch 2 Oil-Linked ETNs: Top Portfolio Products

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ProShares announced the launch of two new leveraged exchange-traded products linked to West Texas Intermediate crude oil.

UBS ETRACS – ProShares Daily 3x Long Crude ETN (WTIU) – and UBS ETRACS – ProShares Daily 3x Inverse Crude ETN (WTID) – are linked, respectively, to the daily compounded 3x leveraged and 3x inverse performance of the Bloomberg WTI Crude Oil Subindex ER.

The exchange traded notes (ETNs) are issued by UBS AG and listed on NYSE Arca.

According to UBS AG’s registration statement with the Securities and Exchange Commission, the ETNs are intended to be tools for sophisticated investors to manage daily trading risks as part of an overall diversified portfolio.

Additionally, the ETNs require an understanding of futures contracts, daily compounding and path dependence of investment results. The return on the ETNs is linked to the performance of the Bloomberg WTI Crude Oil Subindex ER, which in turn is linked to the performance of futures contracts on WTI crude oil.

“Unlike equities, which entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for an underlying physical commodity,” according to the announcement.

The index notionally purchases WTI futures contracts and, as the relevant futures contracts approach their expiration dates, replaces such contracts with other futures contracts with later expirations. The index thus “rolls” its futures positions, and continually avoids delivery of the physical commodity. The WTI crude oil futures contracts tracked by the index roll approximately every other month to the contract that is two months longer in maturity.

According to Steve Cohen, managing director of ProFunds Distributors,  the marketing agent for the ETNs, “These ETNs offer investors new tools to manage risk and potentially enhance returns.”

ProShares notes that WTI crude oil prices can be subject to volatile price movements over short periods of time, affected by numerous factors including changes in supply and demand relationships, governmental programs and policies, as well as national and international monetary, trade, political and economic events.

Pacific Life Launches Fee-Based Variable Annuity at LPL Financial

Pacific Life Insurance Company launched Pacific Odyssey, the company’s fee-based variable annuity, at LPL Financial within LPL’s Strategic Asset Management and Strategic Wealth Management platforms, according to an announcement.

The product offers more than 100 investment options across several different asset classes along with more than 50 funds with net fund expenses currently less than 1%.

Thornburg Launches Long/Short Equity Fund

Thornburg Investment Management launched its first liquid alternative fund, Thornburg Long/Short Equity Fund (THLSX), effective December 30, 2016, according to an announcement.

The fund applies a focused approach to both long and short strategies and will generally hold about 40 long stocks and around 30 short positions.

The minimum initial investment is $2.5 million for individual investors and qualifying institutions purchasing for their own account. For investors purchasing through a fee-based advisory program, the minimum is $100,000, and $2,500 for financial intermediaries purchasing for accounts of others within a “wrap” asset allocation program.

Thornburg Long/Short Equity Fund is a conversion of a private hedge fund created in 2008 which closed on December 29, 2016.

361 Capital Launches U.S. Small Cap Equity Fund

361 Capital launched the 361 U.S. Small Cap Equity Fund (ASFZX, ASFQX, ASFWX), according to a recent announcement. The 361 U.S. Small Cap Equity Fund seeks to achieve long-term capital appreciation that will exceed the Russell 2000® Index return over a three- to five-year time horizon. The Fund will invest at least 80% of the value of its net assets in common stocks of U.S. small capitalization issuers.

The strategy was launched nine years ago at BRC Investment Management, which was acquired by 361 Capital in October, and was previously only available through institutional separate accounts.

Tortoise Credit Strategies Launches Income Bond Fund

Tortoise Credit Strategies, LLC launched its first mutual fund, the Tortoise Select Income Bond Fund (TBNIX, TBNTX), according to a press release. The fund’s benchmark is the Bloomberg Barclays U.S. Aggregate Index.

The investment objective of the fund is to achieve a high level of total return with an emphasis on current income through sector and industry rotation along with security selection. The fund offers institutional and investor share classes with minimum investments of $1 million and $2,500, respectively.

– Read last week’s roundup here: Ritholtz Wealth Launches ESG Portfolio: Top Portfolio Products


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