BetaShares Crude Oil Index ETF - Currency Hedged (synthetic) (OOO)
About this Fund
Fund Detail
PDS | https://informedinvestor.com.au/view/pds/106504-2022-06-09-02:19.pdf |
FUND MANAGER | Beta Shares |
ASX Code | OOO* |
APIR | |
ASSET CLASS | EXCHANGE TRADED FUNDS |
INVESTMENT STYLE | To closely track the performance of the Benchmark, with a currency hedge against movements in the AUD/USD exchange rate, plus an interest component, before fees and expenses. |
INVESTMENT PROFILE | The Benchmark is based on the price of futures contracts. This is not the same as investing in the “spot” price of a given commodity. |
CURRENCY MANAGEMENT | Hedged |
INCEPTION DATE | 11-11-2011 |
BENCHMARK | S&P GSCI Crude Oil Index Excess Return (Hedged into A$) |
FUND SIZE | S&P GSCI Crude Oil Index Excess Return (Hedged into A$) |
DISTRIBUTION FREQUENCY | Annual |
NO. OF HOLDINGS | |
FEES | 0.69% pa |
STRUCTURE |
Benefits
Benefits | The purpose of the Funds is to provide investors with a convenient way to gain exposure to the performance of various commodities, with protection against movements in the AUD/USD exchange rate. Potential advantages of investing in the Units may include:
It is intended that Units will be quoted on the ASX, providing investors with indirect access to the commodity markets in an easily-accessible form.
The value of each Fund’s assets and Net Asset Value per Unit will be reported daily on the BetaShares website.
Because most commodities are traded and priced in U.S. dollars, the return on an investment in commodities for Australian investors is affected by two variables: (i) the price return of the relevant commodity (or commodity index) in U.S. dollars; and (ii) the variation in the AUD/USD exchange rate. To reduce the currency risk for Australian investors, each Fund will offer an exposure to the performance of the relevant commodity Index that is substantially hedged back to the Australian dollar.
As oil historically has shown a low correlation to other major aset classes, investing in OOO can help to diversify a portfolio
100% backed by cashheld by thrid party custodian
|
RISK LEVEL | Very high |
INVESTOR SUITABILITY | A product with a high or very high risk/return profile may be consistent with the investor’s objectives for a growth allocation as part of a broader portfolio, notwithstanding that the risk/return profile of the investor as a whole may be low or medium. |
Risks
Title | |
Detail |
Key Features
Because it can be impracticable for investors to take physical ownership of certain commodities for extended periods (oil or natural gas, for example), investors throughout the world use The Index tracks the performance of West Texas Intermediate (“WTI”) crude oil futures traded on the New York Mercantile Exchange (“NYMEX”). WTI crude is a light, sweet crude oil which, due to its high viscosity and low sulphur content, can produce a high yield of gasoline during the refining process. WTI is also a pricing benchmark for the more than 160 internationally-traded crude oils. The interest component is based on the interest earned by the Fund on its cash holdings and will accrue into the Fund’s Net Asset Value for the benefit of Unitholders. Although the underlying futures contracts (and the Index) are priced in U.S. dollars, the Fund offers an exposure to the performance of the Index that is substantially hedged back to the Australian dollar, with the aim of reducing currency risk for |
Mandate
The Responsible Entity will employ an investment management strategy which aims to closely track the price performance of the relevant Index (hedged into Australian dollars), plus an interest component, before fees and expenses. The Fund will primarily gain exposure to the Benchmark through an investment strategy under which the Fund will purchase a portfolio of assets comprising cash and/or money market instruments (the Portfolio) and enter into swap agreements with one or more Approved Financial Institutions. The Responsible Entity uses the Swap with the aim of ensuring that the price performance of the Fund closely tracks the price performance of the relevant Index (hedged into Australian dollars), plus an interest component, before fees and expenses. Under the Swap, if the Index (hedged into Australian dollars) increases in value, the amount of the increase is payable by the Approved Financial Institution to the Fund. Conversely, if the Index (hedged into Australian dollars) decreases in value, the amount of the decrease is payable by the Fund to the Approved Financial Institution. The interest earned by the Fund on its cash and money market holdings comprising the Portfolio will accrue into the Fund’s Net Asset Value for the benefit of Unitholders. Because the Responsible Entity obtains exposure to the performance of the relevant commodities in the way described above, the Funds are referred to as “synthetic” ETFs. The Responsible Entity may also use various combinations of other available investment techniques including forwards, futures and options to assist in better achieving a Fund’s investment objective. The Responsible Entity may also enter into repurchase agreements, although it has no intention to do so at the date of this PDS. |