RE:RE:RE:RE:RE:RE:RE:What a Deal!Pyritecubed wrote: HOU seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the daily performance of the Solactive Light Sweet Crude Oil Front Month MD Rolling Futures Index ER (the “Underlying Index”, Bloomberg ticker: SOLCCLER). HOU is denominated in Canadian dollars. Any U.S. dollar gains or losses as a result of the ETF’s investment will be hedged back to the Canadian dollar to the best of its ability.
If HOU is successful in meeting its investment objective, its net asset value should gain approximately two times as much on a given day, on a percentage basis, as its Underlying Index rises on that given day.
Conversely, HOU’s net asset value should lose approximately two times as much on a given day, on a percentage basis, as its Underlying Index declines on that given day.HOU takes positions in nancial instruments that, in combination, should have similar daily return characteristics to two times (200%) the daily performance of its Underlying Index, which tracks a rolling position in the light sweet crude oil futures contract traded on the Chicago Mercantile Exchange (the “Referenced Futures Contract”) for a subsequent delivery month. In order to achieve this objective, the total underlying notional value of these instruments will typically not exceed two times the total assets of the ETF. As such, HOU employs absolute leverage. Assets not invested in nancial instruments may be invested in debt instruments or money market instruments with a term not to exceed 365 days, or reverse repurchase agreements with a term not to exceed 30 days
Would you be able to explain what this is not happening? Why HOU doesn't change two times oil? I'd say on days of smaller moves, HOU is acatully pretty close. But on the days that matter like when it moved up 25%, HOU doesn't get even close to two times. It has no problem over performaing it's goal on the way down though.