USCF lists oil fund on NYSE Arca

United States Commodity Funds (USCF) has listed its US Brent Oil fund on NYSE Arca.

The fund is designed to reflect the changes of the spot price of Brent crude oil, by measuring the price of the relevant futures contract.

The contract, traded on the ICE Futures Exchange, is the near month contract to expire, unless the contract is within two weeks of expiration in which case the contract will be the next month to expire.

Although the fund primarily invests in futures contracts for crude oil, it can also invest in other related vehicles such as cash-settled options on futures contracts, forward contracts for crude oil, cleared swap contracts and over-the-counter transactions that are based on the price of crude oil.

USCF says crude oil is the world's most actively traded commodity and the futures contracts that are traded on the ICE exchange are the world's second most liquid forum for crude oil trading.

However, Standard & Poor's director of commodity indexing Michael McGlone says: "Economic sensitive assets were highly correlated in May, as the 14% plunge in front month crude oil futures drove down the returns of several other S&P GSCI components."

He adds: "When the world's most widely traded commodity futures contract declines this rapidly, it often has a tendency to impact most other commodities, and that certainly was the case with crude oil in May."

The index provider says in May, crude oil futures witnessed its largest monthly percentage decline since December 2008.

USCF says commodities and futures are generally volatile, and funds which focus on a single sector tend to experience greater volatility.

NYSE Arca has 781 ETF listings, 91 exchange-traded notes and 171 certificates.