Exchange-traded-funds have flourished in the past few years. However, new concerns are bringing to the forefront how the product can confuse investors, according to The Wall Street Journal.
Lately, ETFs have begun to shy broadly away from the performance of the benchmarks they are supposed to follow. Victoria Bay Asset Management’s U.S. oil fund has fallen more than 15 percentage points behind the oil price it was designed to track. Claymore Securities’ ETF structured to track oil performed the opposite as it was intended and had its oil price fall when oil prices rose. Examples such as those can hurt shareholder returns.