DWTVelocityShares 3x Inverse Crude Oil ETN
DWT Fund Description
The VelocityShares 3x Inverse Crude Oil ETN provides daily 3x inverse exposure to an index of front month WTI crude oil futures contracts.
DWT Factset Analytics Insight
Like most levered inverse products, DWT is designed as a trading tool, not a buy-and-hold investment. The note promises to provide -3x exposure to its referenced index—the S&P GSCI Crude Oil Excess Return Index—for a one-day holding period. The daily reset function means investors holding DWT for periods longer than one trading day will be exposed to the effects of compounding, and could see returns vary greatly from -3x exposure. DWT is subject to counterparty risk; original investor capital plus any return is subject to Citigroup’s ability to pay that obligation. DWT charges a high fee, but its trading costs are of greater importance, since the fund is designed for intraday round-trip trades. Leveraged ETPs can experience rapid swings in investor interest, so check the latest trading spreads and volume. Investors and traders can also consider competing fund SCO—which offers -2x rather than -3x exposure.
Note: DWT replaced DWTI, a nearly identical product under the VelocityShares brand that was delisted the same day DWT launched. Notable differences are a higher fee and a new credit counterparty (Citigroup instead of Credit Suisse).
DWT CHARTS AND PERFORMANCE
DWT Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of DWT. DWT is rated a N/A out of 5.