ProShares Launches Only U.S. Crude Oil ETF With No K-109.29.2016 By John D'Antona Editor, Traders Magazine
ProShares- BETHESDA, Md.– ProShares, a premier provider of ETFs, today announced the launch of ProShares K-1 Free Crude Oil Strategy ETF (Bats: OILK). OILK is the only crude oil ETF that is not a commodities partnership and therefore does not deliver K-1 tax forms to shareholders.
“Many investors want to invest in crude oil with the convenience of an ETF, but all other crude oil ETFs involve complicated tax reporting,” said Michael L. Sapir, co-founder and CEO of ProShares Advisors, LLC, the advisor to ProShares. “OILK is the only U.S. ETF that lets investors get crude oil exposure but skip the K-1 tax form.”
OILK is registered under the Investment Company Act of 1940, unlike other crude oil ETFs, which are commodities partnerships. Like other 1940 Act funds, OILK will provide shareholder tax reporting information on 1099 forms, not the K-1 form issued by partnerships.
OILK seeks to provide total return by providing exposure to the West Texas Intermediate (“WTI”) crude oil futures market in an actively managed ETF. The fund’s strategy seeks to outperform certain index-based strategies by actively managing the rolling of crude oil futures contracts. Rolling means selling a futures contract as it nears its expiration date and replacing it with a new one that has a later expiration date. Managing the rolling of futures contracts can potentially mitigate losses from contango (when new contracts are more expensive than expiring ones) and help the fund benefit from backwardation (when new contracts are less expensive than expiring ones).
ProShares helps investors to go beyond the limitations of conventional investing and face today’s market challenges. ProShares strives to help investors build better portfolios by providing access to a wide variety of investment exposures and strategies delivered with the liquidity, transparency and cost effectiveness of ETFs. Our wide array of ETFs can help you reduce volatility, manage risk and enhance returns.
Investing involves risk, including the possible loss of principal. ProShares ETFs are generally non-diversified and each entails certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), leverage and market price variance, all of which can increase volatility and decrease performance. Investing in the energy industry is prone to significant volatility resulting from dramatic changes in commodities prices. There are additional risks related to large institutional purchases or sales, changes in exchange rates, government regulation, world events, economic and political conditions in the countries where energy companies are located or do business, and risks for environmental damage claims. Certain derivative instruments will subject the fund to counterparty risk and credit risk, which could result in significant losses for the fund. Please see their summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective
This ETF seeks to provide total return through actively managed exposure to the West Texas Intermediate (“WTI”) crude oil futures markets. The fund does not invest in nor seek exposure to the current “spot” or cash price of physical crude oil. The fund’s strategy seeks to outperform certain index-based strategies by actively managing the rolling of WTI crude oil futures contracts to (a) mitigate the negative impact of contango, or (b) benefit from the backwardation present in the WTI crude oil futures markets, but there can be no guarantee that it will be successful in doing so. The fund seeks to remain fully exposed to WTI crude oil futures, even during adverse market conditions. As such, the fund should be expected to decrease in value when WTI crude oil futures markets deteriorate. During adverse conditions, the fund seeks to lose less than index-based strategies that formulaically roll contracts. However, there can be no assurance that the fund will outperform index-based or other actively managed strategies that invest in WTI crude oil futures markets. Active management may also increase transaction costs. Investors should actively manage and monitor their investments. This ETF may not be suitable for all investors.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor.
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