ETFs v. Cash and Futures YTD

The past month has served as a prime example of why to invest in futures contracts instead of ETFs. We still haven’t heard a good answer to our question- why invest in an ETF when you can just roll December contracts annually?


3 comments

  1. better yet – why not just go long the futures and short the etf? Looks like a risk free way to mint money. There must be some catch – maybe the cost of carrying the short etf offsets the edge that futures have. Any idea?

  2. Actually, something very similar occurred to me…. I recently wanted to go long treasuries, so I decided to short the x2 inverse treasury ETF. My thinking was three fold:

    – One, I wanted to be long treasuries
    – Two, I wanted to sell the “inefficient” ETF, and
    – Three, I understand that leveraged and inverse ETFs are even more inefficient.

    In my case I did very well, but then “one” above was most of that I suspect.

    What say you, John? Are these good ideas?

  3. Long only ETFs based on commodities are one of the most stupid ideas in the history of finance, all this ways of ETFs to get “exposure” to a market are in reality just ways to get exposure to commissions. (They are very efficient in that, by the way).

Write a Comment

The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.