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AccuShares launches oil ETF


AccuShare has launched an exchange-traded fund (ETF) designed to provide a better way for investors to capture the up and down opportunities in crude oil pricing and market volatility.

The fund's two share classes – the AccuShares S&P GSCI Crude Oil Excess Return Up Shares (OILU) and the AccuShares S&P GSCI Crude Oil Excess Return Down Shares (OILD) – address known shortcomings with existing exchange-traded products in the oil market.
AccuShares says the new ETF offers several benefits to investors including: the lowest annual expense ratio of any crude oil ETOP (0.29 per cent); inverse exposure with no daily rebalancing impact; no direct futures trading cost; no margin account for inverse exposure; and because of AccuShares paired share design, the fund only holds cash and cash equivalents so there is no need to enter into derivative transactions in order to gain crude oil futures price exposure.
"Billions of dollars have been invested in oil exchange-traded products (ETPs) over the past few years, but investors have often found themselves frustrated by the cost and inefficiency of the products available to gain exposure to this market," says Jack Fonss, chief executive officer and co-founder at AccuShares. "Our innovative structure allows us to bring to market crude oil linked securities that are not only cost effective, but provide returns that are not subjected to the impact of a portfolio managers trading of the underlying securities and their ability to replicate the underlying index.”
OILU and OILD are designed to track changes in the S&P GSCI Crude Oil Index Excess Return on a monthly basis. The funds are intended for investors who want a cost-effective, targeted, and transparent exposure to the price of light, sweet, West Texas Intermediate (WTI) crude oil as represented by the index. Investors may choose Up or Down shares based on their individual opinion of the future direction of the underlying index.
"Daily rebalancing has been a key concern with leveraged and inverse ETPs, as it can result in what we describe as 'non-intuitive returns' — returns that over relatively short periods of time deviate from what investors see in the performance of the underlying commodity, in this case oil," says Bob Rokose, chief financial officer at AccuShares. "This is unavoidable with the current product structures. Our technology solves for this."
Rokose says that in addition to its own funds, AccuShares is exploring the possibility of licensing its technologies to other financial services companies for applications in additional investment products.
"We are excited to continue our valued relationship with AccuShares and to be the listing venue for their first two funds to launch this year," says Jeff McCarthy, vice president and head of ETP listings at Nasdaq. "Last year, we helped AccuShares hit a milestone with the listing of their very first products – VXUP and VXDN – and we look forward to partnering on new and innovative products in the future."
"We believe we're in the early stages of a new era of innovation in the ETF industry. Our goal is to use technology to give investors the ability to act on directional views relative to a broad-based market in an efficient and low cost way. We plan to continue to broaden our own product family, and will make our technology available to others as well," says Rokose.

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