Would you buy this ETF?

Discussion in 'ETFs' started by crizain, Apr 26, 2011.

  1. crizain


    I'm part of this group that reviews new fund ideas and I'm curious to see what you think about this. Here's the fund profile:

    ProtoShares is launching a Global Conflict Fund. It’s designed to appreciate whenever instability occurs in the world. Longing defense contractors and oil futures, as well as shorting major indices in traditionally unstable regions of the world. The fund will see increased NAV following global instability in any one region of the world. It holds three distinct assets:

    Defense Contractors: The fund tracks the AMEX defense index. The index’s top 10 holdings include: Boeing,General Dynamics, Northrop Grumman, Raytheon, Mantech Intl, Esterline, Teledyne, Goodrich Corp, L-3Communications and Lockheed Martin.

    Oil Futures Contracts: The fund purchases NYMEX light sweet crude oil futures three months from delivery date. The fund rolls these to the next month contracts when 60 days is reached before delivery.

    Short International Positions: The fund will short broad, index-based positions in the following areas: Middle Eastern Gulf States, Mexico, Latin America, Northern Africa, and Southeast Asia.

    Based on all of this, would you buy/trade this fund if an opportunity presented itself?
  2. How much are they going to invest in oil?. Trading a fund where you know they're going to be buying and selling millions of dollars worth of 2 specific oil contracts on a specific day might be interesting.
  3. crizain


    Good question. You bring up a sensitive issue with fund providers right now with new product development. Consider the ipath pure beta ETNs, the strategies are marketed as ways to minimize contango but at the same time they are also offering the manager some flexibility in roll selection to avoid just what you are inferring.
  4. The underline though is pretty much vague. How do you measure tracking success? Gold is now the standard for crisis safe heaven and the SF. Why choosing a vague ETF products that can lose tracking easily?
  5. ==========
    Well, like an ipo, a good idea may[possibly] sell;
    as far as measuring it, probably would wait/ measure it a year.

    With GLD, gold & SO MANY things/ trends to trade;
    probably would wait a year,TX:cool: So, no @ least a year.