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Asking very generally here because specifics obviously could change the action of an ETF and its underlying on a case by case basis. But generally, how does the creation of an ETF based on futures of a commodity differ from that of an ETF based on the actual possession of the underlying? In terms of “paper” [asset] dilution of the real supply, price action of the ETF and the underlying, usage of the ETF by hedge funds on arbitrage plays, etc…

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  • This question has one vote-to-close, as one that's not PF, but rather, Economics. I'll re-visit, and if it's closed, I will reopen and migrate to there. I'm honestly not convinced yet. This question impacts me as an investor, in my opinion. Oct 18 at 12:35
  • I could imagine an answer that elaborates into rolling issues of contracts and how that can cause the ETF not to maintain exposure to the underlying asset. This would definitely be relevant for personal finance
    – Manziel
    Oct 18 at 15:24

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