Argus Set to Draw ETF Attention

United States Commodity Funds, the firm that runs the United States Natural Gas Fund (UNG - commentary - Trade Now) and the United States Oil Fund (USO - commentary - Trade Now), has recently shown interest in launching a new fund designed to track the performance of the Argus sour crude oil index. The firm is also considering the launch of a short natural gas fund for investors looking to play decreases in the commodity's price.

London-based Argus Media's Argus Sour Crude Index has gained considerable attention from Latin American and Middle Eastern oil exporters since last week, when Saudi Arabia's Saudi Aramco abandoned West Texas Intermediate crude oil as the basis of its pricing for U.S. customers. According to Reuters, this action stemmed from the growing frustrations caused by the divergence between crude prices and the U.S. Gulf Coast's market conditions.

In response to the growing popularity of the index, CME Group (CME - commentary - Trade Now) and Intercontinental Exchange (ICE - commentary - Trade Now) are planning to launch futures tied to the Argus Index in the near future. United States Commodity Funds says the availability of a fund backed by these contracts will depend on the level of investor interest these attract.

The firm is also mulling an additional fund designed to short natural gas. This ETF will come on the heels of the United States Short Oil Fund (DNO - commentary - Trade Now), which began actively trading on September 29. With record supplies continuing to smother the price of natural gas, the new fund should gain considerable attention if it materializes.

At the time of publication, Dion held no positions in the stocks or ETFs mentioned.

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At the time of publication, Dion held no positions in the stocks or ETFs mentioned.

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.