Harga Minyak 2016 Yang Membuatkan Anda Tak Balik Kampung
#Investors may want to gain exposure to oil for their individual retirement accounts (IRAs) or Roth IRAs,.,. With the advent of exchange traded funds (ETFs), as well as stocks in traditional oil companies, investors can tailor their oil investments to fit their specific risk profiles,.,.
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Oil As an Inflationary Hedge
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Investors who are saving for retirement may want to gain exposure to oil as an inflationary hedge for their portfolios,.,. Some financial experts see holding oil, and commodities in general, as a way to protect investments against the negative impact of inflation,.,. An inflation hedge can help to insure a portfolio against the risk of inflation,.,. An increase in oil is thought to be a sign of an inflationary environment,.,.
ETFs That Track the Price of Oil
Investors may want to gain straight exposure to the price of oil,.,. There are a number of ETFs that track the price of oil,.,. These ETFs allow for commodity exposure without having to trade a futures contract,.,. The trading of futures involves significant risk due to the leverage involved and is generally not appropriate for IRAs,.,. Although some custodians do allow the use of IRAs for futures trading, most major banks and IRA plans do not allow futures trading in IRAs,.,.
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The most popular and liquid ETF that tracks oil is the United States Oil Fund, which holds only front-month futures contracts on WTI crude oil,.,. The fund’s investment objective is to track the daily percentage change in the price of oil,.,. The fund rolls its position in the front-month contract to the next month within two weeks of expiration of the contract,.,. The fund may also invest in forwards and swap contracts based upon the price of oil,.,.
The United States Oil Fund began trading in April 2006,.,. It has $2,.,.83 billion in assets under management (AUM) with an expense ratio of 0,.,.66%,.,. This expense ratio is fairly reasonable considering the fund has to endure the expense of rolling the futures contracts on a monthly basis,.,. The fund is very liquid, with an average daily trading volume of $390 million,.,. This ensures that investors are able to enter and exit positions easily,.,.
Since it tracks the price of oil, the United States Oil Fund does have a substantial degree of volatility,.,. The fund has a higher beta of 1,.,.59 with a large standard deviation of 28,.,.69 as of November 2015,.,. This higher volatility is due to the large drop in oil prices from 2014 to 2015,.,.
There are also leveraged ETFs that track a multiple of the price of oil or provide performance inverse to the price of oil,.,. For example, the VelocityShares 3X Long Crude Oil exchange-traded note (ETN) provides 3x long exposure to an index that includes only front-month futures contracts for WTI crude oil,.,. This ETN began trading in 2012,.,. The fund has around $985 million in AUM with an average daily trading volume of $234 million as of November 2015,.,. The fund has a high expense ratio of 1,.,.35%,.,.
Leveraged ETFs are prone to having higher expense ratios because they require more active trading and position management to provide the leveraged performance,.,. The VelocityShares 3X Long Crude Oil ETN is not intended to be a long-term investment vehicle,.,. The fund's high volatility combined with the high expense ratios entails a substantial degree of risk that is higher than most investors are willing to withstand in their retirement accounts,.,.
Oil Sector ETFs
Another way for investors to gain exposure to the price of oil is through ETFs that hold the stock of companies in the oil and energy sector,.,. Stocks in the oil and energy sector have a high correlation to the price of oil,.,. These funds are an easy way for investors to gain exposure to the energy sector,.,. They are diversified, which can reduce the volatility of the investment compared to holding the stock of a single energy company,.,. Further, holding stocks in the energy sector offers the possibility for earning dividends on the stock,.,. This is a major advantage over ETFs that merely track the price of oil and offer no opportunity for a regular income stream,.,.
The most prominent energy sector fund is the Energy Select Sector SPDR ETF,.,. This fund tracks a market-cap weighted index of energy companies in the S&P 500,.,. The ETF has over $11 billion in AUM and pays a dividend yield of 2,.,.9% as of November 2015,.,. It has a very small expense ratio of 0,.,.14%,.,. Exxon Mobil is the fund's largest holding, with a weighting of 16,.,.91%,.,. The second-largest holding is Chevron, with a weighting of 13,.,.11%,.,. Schlumberger is the third-largest holding at 7,.,.74%,.,. The Energy Select Sector SPDR ETF offers an easy and inexpensive way to gain exposure to large-cap space for energy companies,.,.
Individual Oil Company Stocks
Investors may also hold the stocks for individual oil companies in their IRAs,.,. This allows investors to pick their specific holdings,.,. Investors may want to look at companies in the mid- or small-cap space that can allow for greater price appreciation,.,. Some investors may wish to pick the part of the oil industry in which they make their investments,.,. Since the oil industry is so massive, there are many types of companies up and down the supply chain,.,. Income-oriented investors may want to focus on companies that pay high dividends currently, or companies that are likely to grow dividends in the future,.,.
Skilled investors may be able to spot individual oil companies that have great potential for price appreciation,.,. However, a concentrated holding also entails greater risk,.,. This is especially true for companies that are actively producing oil, since there could always be an oil spill or another environmental accident,.,. This type of incident can have a drastic impact on the price of one company's stock,.,.
As an example, BP's stock actually held on fairly well right after the Deepwater Horizon incident in April 2010 by staying steady at around $62 per share,.,. Analysts were hopeful that the company could withstand the adverse impacts of the incident,.,. However, the stock eventually fell to around $27 a share by that June as it became clearer that damages and lawsuits were going to pile up,.,. Holding an individual oil stock does allow for the possibility of greater return, but it may be riskier,.,. Once again, investors need to consider their individual risk tolerances when deciding what types of oil investments to make in their IRAs,.,.
