If You Bought This Fund Before Oil Prices Rose... 213% Increase Over 2 Years

KBSTAR US S&P Oil Production Companies 2-Year Return 213%

[Asia Economy Reporter Junho Hwang] The KBSTAR U.S. S&P Oil Production Companies (Synthetic H) ETF, which invests in U.S. crude oil production companies, is experiencing soaring returns.

According to KB Asset Management on the 17th, the ETF's year-to-date return is 43.4%, and its two-year return reaches 213%.

The KBSTAR U.S. S&P Oil Production Companies (Synthetic H) ETF does not invest directly in crude oil futures (WTI futures) but tracks the S&P Oil & Gas Exploration & Production sub-industry index, which consists of U.S. companies engaged in oil and gas exploration and production.

Major components of this index include PBF Energy Inc, Phillips 66, Chevron, and ExxonMobil. These companies are relatively sensitive to oil price fluctuations, but since rollover costs do not occur, they can yield higher returns during oil price increases compared to direct investment in crude oil futures. Additionally, the tracking error between the commodity and the underlying index is low.

Geum Jeongseop, Head of ETF Marketing Division at KB Asset Management, said, "The energy sector has a high correlation with oil prices, so this ETF is worth considering for those who want to invest in oil during periods of rising prices. Unlike crude oil futures ETFs, rollover costs do not occur, making it a viable alternative for medium- to long-term crude oil futures investment."

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ coalition, which includes non-OPEC oil-producing countries such as Russia, recently announced a reduction of 2 million barrels per day in crude oil production. The scale of the production cut decided by OPEC+ this time is the largest since the COVID-19 pandemic.