1.Daylight Resources Trust(DAY.UN) +7.5%
2.Crescent Point Energy Trust(CPG.UN) -1.3%
3.Baytex Energy Trust(BTE.UN) -20.9%
In this twelve month period DAY.UN paid C$1.38 in distributions, CPG.UN C$2.64 and BTE.UN C$2.64. During the same period the TSX Capped Energy Index returned -35.3%.
The production profile of these trusts is diverse: CPG's production is 84% light/medium oil, BTE 57% heavy oil and DAY 69% natural gas. Changes in average daily production:
DAY Q4/07: 20 583 boe/d Q3/08: 21 782 boe/d change: +5.8%
CPG Q4/07: 33 351 boe/d Q3/08: 37 630 boe/d change: +12.8%
BTE Q4/07: 39 304 boe/d Q3/08: 42 538 boe/d change: +8.2%
2 comments:
Spicer do you have any comment about this article: http://ftalphaville.ft.com/blog/2009/01/27/51707/unprecedented-inflows-into-oil-etfs/
Do you think its safe to invest in ETFs or is there hiding huge risk of losing all money?
I'm far from an expert on commodity ETFs, but I do think that ETFs that have exposure to the commodity in question through physical goods or futures contracts are quite safe. Exchange Traded Commodities(ETC), which gain the exposure through less direct ways are far less secure. As with stocks the lack liquidity may cause problems with some ETFs.
Based on that article it seems that retail investors are flocking into the oil etfs. The question is why? I see two likely reasons. One: Investors expect a significant near term gain in the price of oil. Unfortunately the masses are usually wrong and personally I don't think we will see any significant upward moves in the next four to seven months due to a number of reasons, one of biggest being the rapidly growing unemployment in the US. Reason number two is oil as a safe haven. Especially with the current low prices and the overhangin possibility of quantitative easing(money printing) oil is probably seen as a alternative or addition to gold as a safe haven. I think that even in a deflationary environment oil with todays prices can be a very good medium term investment(but not a short term).
I could be wrong on everything mentioned above.
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