ETF Securities has launched an exchange-traded investment product that tracks an index of oil and gas futures that is hedged daily against movements in the dollar/euro exchange rate.
The company has released the ETFS EUR Daily Hedged Energy DJ-UBS ED on Deutsche Börse. The product tracks the Dow Jones-UBS Energy Sub-Index EUR Hedged Daily, which is designed to reflect the prices of various oil and gas futures, such as WTI Crude Oil and Brent Crude.
“Oil prices have historically acted as one of the best hedges against inflation and more recently have provided a hedge against Middle East risk,” says Nicholas Brooks, ETF Securities head of research and investment strategy. “US natural gas prices are currently trading near their marginal cost of production, indicating potential for longer-term gains.”
ETF Securities says the daily hedging of the Dow Jones index means it is better at reflecting prices of the underlying assets than indices that only reset their swaps on a monthly basis.
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