#contango-drag

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#futures-roll-costs #oil-etf #brent-crude #retail-investing #oil-fund-performance #commodity-etf-mechanics
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from24/7 Wall St.
2 days ago

BNO Is Up 52% But the Hidden Costs Are Quietly Eating Your Returns

BNO's 50.85% year-to-date gain masks structural costs from futures roll drag and a 1.14% expense ratio that separate returns from actual Brent crude prices.
from24/7 Wall St.
2 days ago

USO Is Up 64% This Year and Still Losing the Long Game

USO does hold front-month WTI futures contracts and rolls them forward each month, selling the expiring contract and buying the next. When the futures curve is in contango, later-dated contracts cost more than near-term ones, so that the monthly roll is a guaranteed loss. You sell low, buy high, repeat. Over time, those small losses compound into a meaningful gap between what oil prices do and what USO shareholders actually earn.
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