Dislocations highlight risks of commodity ETNs

Notes face scrutiny after problems with Barclays’ OIL and GAZ products

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ETNs provide investors with access to commodity markets, but may have structural issues

Early this year, strange things started happening to one of Barclays' popular exchange-traded notes (ETNs) for tracking the price of oil. The iPath S&P GSCI Crude Oil Total Return Index ETN – better known as OIL, its ticker on the NYSE Arca exchange – started trading at a huge premium to its underlying index. In the three weeks from December 31 to January 20, the index plunged 35% while the market price of OIL fell just 12%.

It is unlikely that most investors noticed the dislocation, though, unt

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