Just my opinions, not advice and I'm sorry if some find this condescending, my intention is education.
For those that don't understand the performance of this - THIS PRODUCT IS NOT AN INVESTMENT IN PHYSICAL CRUDE OIL. Here is a quote from the Betashares OOO web page:
The index which OOO aims to track provides exposure to the price of West Texas Intermediate (WTI) crude oil futures, hedged for currency exposure.
The price of oil futures contracts is not the same as the “spot price” of oil. As such, OOO does not aim to, and should not be expected to, provide the same return as the performance of this spot price. The performance of an ETF that is linked to oil futures may be materially different to the performance of the spot price of oil itself. This is because the process of “rolling” from one futures contract to the next to maintain investment exposure can result in either a cost or benefit to the Fund, affecting returns. Please refer to the PDS for further information and you can view a more detailed Insights post related to this issue here.
The prices of futures contracts for subsequent periods are known as the ‘futures curve’. See the Resources section below for a link to the WTI Crude Oil futures curve, which indicates whether rolling into subsequent futures contracts will be at higher prices, which would tend to reduce Fund returns, or at lower prices, which would tend to increase Fund returns, assuming no change in the spot price for oil.
I would urge you to closely read the PDS and talk to your advisor before you invest in this product. You should not invest in it if you do not understand the mechanics and risks of this. Also you would be well served to learn about contango and backwardation in futures curves, and what roll yield is. I would also suggest investigating management risk, as an example look at what happened when futures went negative in 2020. Also make sure you understand the currency hedging strategies and how this can affect performance. There are other risks sets out in the PDS that I have not mentioned here that you also need to understand.
Personally I do not believe this is a product to buy and hold. Your eyes need to be wide open. I have made good money trading this several times in the last 12 months or so but I do not own it at the moment.
DYOR - your money, your responsibility.
OOO Price at posting:
$19.36 Sentiment: None Disclosure: Not Held
