The aim of the fund is to secure daily investment results that mirror 200% of the day-to-day performance of the S&P Oil & Gas Exploration & Production Select Industry Index. Such an ambitious growth target is heavily reliant upon the active and volatile oil industry. This post will delve into the details of how the index functions, how this target is chased with the help of the oil industry and the possible risks and opportunities involved.
1. The fund aims to replicate 200% of the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index.
2. Achieving this growth target heavily depends on the active and highly volatile oil industry.
3. An increase or decrease in oil prices significantly impacts the performance of the S&P Oil & Gas Exploration & Production Select Industry Index and subsequently the fund's results.
4. The fund's objective brings high levels of risk and uncertainty due to its dependence on the volatile oil and gas industry.
5. Potential investors should be aware of and comfortable with these high-risk levels before considering investing in this fund.
In 2020, the S&P Oil & Gas Exploration & Production Select Industry Index experienced a drastic decrease of 50.2% due to the global pandemic and its impact on oil prices.
The fund's objective is no small feat and entirely depends on the volatile nature of the oil and gas industry. If oil prices increase or decrease even slightly, it significantly affects the performance of the S&P Oil & Gas Exploration & Production Select Industry Index and, consequently, the fund's results. Therefore, potential investors need to be comfortable with high levels of risk and uncertainty before considering investing in this fund.