The American Stock Exchange is hoping to launch the first U.S.-listed oil exchange-traded fund next week, pending approval from the Securities and Exchange Commission. The fund, initially filed in May of last year, will invest primarily in futures contracts traded on the New York Mercantile Exchange, and will not physically hold barrels of oil.
The new United States Oil Fund, a commodity pool managed by Alameda, Calif.-based Victoria Bay Asset Management – formerly Standard Asset Management – and manager John Hyland, will trade under the ticker symbol “USO,” according to a media invitation from the Amex. It is designed to track the price of West Texas Intermediate light, sweet crude.
According to David Jackson, editor of the blog ETF Investor, the new fund, no matter how popular, shouldn’t roil the oil markets, as is feared of a proposed silver ETF. “Oil is a highly liquid market, so this ETF won’t have any impact on the oil price,” he said.
The Wall Street Journal first reported the Amex’s plans on Tuesday, reporting that the fund is still subject to final approval from the SEC. Neither the Amex nor Victoria Bay would comment on the listing, citing the SEC’s quiet period for new securities listings.
The new ETF will join a slew of commodity-based funds that have launched on U.S. exchanges since State Street Global Advisors launched the now $6.1 billion streetTRACKS Gold Trust in November 2004. Last month, Deutsche Bank launched its Commodity Index Tracking Fund on the Amex, using the same commodity pool structure proposed for the oil fund. What’s more, market-watchers are now awaiting with bated breath the approval and launch of Barclays Global Investors’ iShares Silver Trust, expected in the near future.
While it’s the first oil ETF available in the U.S., the U.S. Oil Fund comes eight months after the world’s first oil ETFs, ETF Securities’ Oil Securities funds, one tracking New York’s WTI contract and the other London’s Brent crude contract. Those funds, which launched on the London Stock Exchange in July 2005, garnered more than $40 million in assets on their first day of trading.
