[Editor’s Note: A version of this article first appeared as a blog on IndexUniverse.eu, IndexUniverse.com’s sister site. European readers should regularly check IndexUniverse.eu, which provides in-depth analysis of European ETF news and complete European ETF data.]

My colleague, IndexUniverse.com editor Matt Hougan, recently asked me a question about a blog I wrote exploring the wide variance in the performance of ETFs tracking crude oil futures. The blog noted that there were 11 ETFs ostensibly tracking crude oil futures in Europe, but the funds had little in common beyond their name: In fact, their year-to-date performance through Oct. 31, 2009, varied from up 5.2 percent (ETF Securities Crude Oil ETC) to up 33.1 percent (ETF Securities Brent Oil ETC).

*Based upon index return for the period 12/31/08 – 4/15/09, then ETC return

(You can read the full blog here.)

What caught Matt, I think, was that the top- and bottom-performing funds both track the “front-month” crude oil futures market. There’s a huge variety of oil ETFs in Europe, including funds tracking futures dated out three years, but these two front-month futures funds were the top and bottom performers.

Why the difference?

There are two primary reasons, it turns out.

First, Brent oil (which OILB tracks) has significantly outperformed WTI (tracked by CRUD) this year, as the chart below shows.

Previous Page

1  |  2  |  3

Next Page