Underlying concerns

A variety of commodity-linked exchange-traded funds has been launched in the US over the past year. But while each firm trumpets the benefits of its product, most have suffered poor performance due to futures contract price dynamics. By Navroz Patel

How keen would you be to trade a new security whose net asset value (NAV) has dropped by around two-thirds over the past six months? For some participants in the US commodity exchange-traded fund (ETF) market, the answer appears to be: very. The US Oil Fund ETF, which is listed on the American Stock Exchange (Amex) and managed by Colorado-based Victoria Bay Asset Management, has experienced a marked increase in trading activity since late December, with January the busiest trading month since