Q:

What are some leveraged 3x oil ETFs?

A:

Quick Answer

Oil exchange traded funds that have 3x leveraging include VelocityShares 3x Long Crude Oil exchange-traded note and VelocityShares 3x Inverse Crude Oil exchange traded note, explains ETFdb.com. Other exchange traded funds of a similar nature are the ERX and ERY Direxion Daily Energy Bull and Bear 3x Shares funds, according to Direxion Investments.

Continue Reading

Full Answer

VelocityShares 3x Long Crude Oil and VelocityShares 3x Inverse Crude Oil exchange traded notes were issued by Credit Suisse on February 8, 2012, reports ETFdb.com. The funds, which have an expense ratio of 1.35 percent, track the S&P GCSI Crude Oil Index Excess Return benchmark, which exclusively invests in West Texas Intermediate crude oil futures contracts. As of January 2016, the VelocityShares 3x Long Crude Oil fund had a 52-week low of $2.69 and a 52-week high of $43.20, while the VelocityShares 3x Inverse Crude Oil fund had a 52-week low of $56.32 and a 52-week high of $282.76.

The brainchild of Direxion Investments, the ERX and ERY Direxion Daily Energy Bull and Bear 3x Shares funds track the Energy Select Sector index, which invests in areas ranging from pipelines to oil, states the firm's website. The ERX fund has a 1 percent gross expense ratio, slightly lower than the ERY fund's 1.08 percent ratio. The inception date of both funds is November 6, 2008.

In general, leveraged exchange-traded notes utilize debt and financial derivatives to boost returns, notes Investopedia. Because of their highly risky nature, investors should treat these funds solely as trades, not investments.

Learn more about Investing

Related Questions

Explore