Stocks
Iran offers to reopen Hormuz — and the year's best-performing fund holds tanker rentals
Iran said it would reopen the Strait of Hormuz within a week if Washington lifts its blockade of Iranian ports. Saudi Arabia is preparing to restart its East-West pipeline. Crude sold off on it, and the best-performing US-listed fund of the year sold off with it.
That fund is BWET, and it owns no stock at all. It holds short-dated freight futures — contracts on what it costs to rent a crude tanker, mostly on supertanker runs from the Middle East to China. After the strikes on Iran at the end of February, traffic through Hormuz nearly stopped. Ships rerouted around Africa, vessels went scarce, and renting one to load inside the Persian Gulf passed a million dollars a day for the first time.
The retail boards here are thick with it now, alongside a fund that doubles crude's daily move, the one that doubles it in reverse, a plain oil tracker and Exxon. Only the last of those is a company.
The money did not spread evenly across them. In March, $977 million went into the inverse fund — the one that pays when crude falls. That was its biggest month since it launched in 2008. Tanker rates went to record highs after that, and the fund now sits near its lows.
There is nothing to read on any of these. No quarter, no chief executive, no product, no filing anyone is waiting on. The research is finding out whether ships are moving through a strait, and the position closes when two governments settle something on a schedule nobody holding it controls. That is what a good part of the year's trading has been.
Where you are, can an ordinary brokerage account take a position on a commodity or a freight rate directly — and what does the exchange or the broker make you do before it lets you?
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