IN PICTURES: 20 Tools For Building Up Your Portfolio
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ETF
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NAV
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Year-to-Date
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Expense Ratio
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Total Assets
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U.S. Oil Fund ETF (NYSE:USO)
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$37.90
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14.63%
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0.45%
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$2.8B
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PowerShares DB Oil ETF (NYSE:DBO)
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$26.06
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35.09%
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0.50%
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$258M
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U.S. 12 Month Oil ETF (NYSE:USL)
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$38.40
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28.47%
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0.60%
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$196M
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January 1, 2009 – June 9, 2009
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Crude Focus
The PowerShares DB Oil ETF is the current leader among the ETFs listed above in terms of returns since the beginning of the year through June 9. The DBO fund is composed of futures contracts on light sweet crude oil (West Texas Intermediate). The fund lost just over 40% of its value during 2008, but has moved upward steadily since the beginning of March. DBO's 0.50% expense ratio is well above the 0.09% an investor would pay for the SPDRS S&P 500 Index Fund (NYSE:SPY), but among its peers mentioned it falls right in the middle.
Crude Oil Plus
The U.S. Oil ETF also tracks the performance of light, sweet crude oil (WTI). In addition to holding futures contracts on light sweet crude oil, the USO fund may also invest in non-negotiated contracts with less liquidity than futures contracts and in taxable money market funds like the Goldman Sachs (NYSE:GS) FS Government Select. Leading the group of oil ETFs in terms of total assets, the USO fund also has the lowest expense ratio of 0.45%.
A Dozen in the Other
The U.S. 12 Month Oil ETF tracks the performance of light, sweet crude oil (WTI) by calculating the daily movement of the average price of 12 futures contracts on crude oil. The USL fund recoiled just over 42% last year while its sister fund, USO, was down nearly 55%, suggesting that the 12-month average strategy adds a buffer against downward oil price momentum. (For more, see Fueling Futures In The Energy Market.)
Final Thoughts
Oil futures can be a volatile addition to any portfolio, so it's helpful to understand available ETF options that investors can choose from in order to capture the upward movement of oil prices. (For more on the oil industry, see our Oil And Gas Industry Primer.)
