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?


  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).

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