WisdomTree rejigs oil & gas ETF indices
Exchange-trade fund (ETF) provider WisdomTree is changing the indices for a range of products tracking prices of oil and gas.
In announcements to the stock exchange today, WisdomTree said it planned to change the underlying indices for five currency hedged funds and six leveraged and inverse funds, including the $224.9m WisdomTree WTI Crude Oil 2x Daily Leveraged ETF.
Between them the funds have more than $390m (£303m) in assets.
The changes are designed to improve the stability of the ETFs and make them “less susceptible to adverse outcomes from volatility in the relevant futures markets”.
In a circular to shareholders, the company explained that the new indices were based on the prices of longer-dated futures contracts.
The proposed changes would also help protect investors against futures prices turning negative, as happened earlier this year. If a new underlying index falls below zero, WisdomTree said it would be “closed at zero and terminated on the same day”, meaning investments would not fall below zero.
The ETFs affected by the proposals are:
- WisdomTree WTI Crude Oil – EUR Daily Hedged
- WisdomTree WTI Crude Oil – GBP Daily Hedged
- WisdomTree Natural Gas – EUR Daily Hedged
- WisdomTree Brent Crude Oil – EUR Daily Hedged
- WisdomTree Brent Crude Oil – GBP Daily Hedged
- WisdomTree WTI Crude Oil 2x Daily Leveraged
- WisdomTree WTI Crude Oil 1x Daily Short
- WisdomTree Natural Gas 2x Daily Leveraged
- WisdomTree Natural Gas 1x Daily Short
- WisdomTree Brent Crude Oil 2x Daily Leveraged
- WisdomTree Brent Crude Oil 1x Daily Short
Shareholders have been invited to vote on the proposals. Meetings for investors in the currency hedged funds will be held on 19 October, while leveraged and inverse fund investors can vote at meetings on 15 October.