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. john murphy says:

    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. Kim Miller says:

    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. Nicolas Granja says:

    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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