In Wednesday’s options trading we noticed bullish call buying in U.S. Oil Fund (NYSEArca: USO) as the exchange traded fund is within shouting distance of its highest price level in nearly a year.
There are many ETFs and exchange traded notes that follow oil futures.
USO still remains the most popular fund in terms of asset level ($1.6 billion in assets), and average daily trading volume (10.3 million shares), but there have been many newer product releases in the space that have delivered encouraging real performance results over time. [ETF Chart of the Day: Oil Services]
Brent Oil continues to outperform NYMEX Light Sweet Crude Oil, as U.S. Brent Oil Fund (NYSEArca: BNO) is up 11.36% just year to date versus USO up 2.81%.
Other funds that have been gaining an institutional following and thus assets include Teucrium Crude Oil (NYSE: CRUD), which is up 4.24% year to date, Powershares DB Oil (NYSEArca: DBO), which has rallied 4.31% year to date, and U.S. 12 Month Oil Fund (NYSEArca: USL) which is up 4.62%.
PowerShares DB Crude Oil Long ETN (NYSEArca: OLO) is basically the ETN version of DBO, and also iPath S&P GSCI Crude Oil Total Return ETN (NYSEArca: OIL) and iPath Pure Beta Crude Oil ETN (NYSEArca: OLEM) are also out there for those portfolio managers that prefer ETN exposure over ETF exposure.
The key to navigating the “Oil” ETF/ETN space is simply understanding the different methodologies that are present and how each fund is constructed perhaps differently than the next. This information, coupled with your true goals as a manager or investor as far as what you are looking to track and deliver in terms of results to your portfolios, should help isolate the best potential choices within this space from an investment standpoint.
Powershares DB Oil