For every major commodity that is revered and discussed by investors, such as gold, oil and agriculture, there is often another that is overlooked. Think silver, copper and gasoline, all backed by exchange traded funds (ETFs) that aren’t getting as much attention.
The gasoline ETF United States Gasoline (NYSEArca: UGA) has been fairly overlooked, meaning many investors have missed out on a bull market within this commodity. According to Matt Hougan for Index Universe, the recently released November S&P GSCI commodity report shows that the S&P GSCI Energy Index was up 10.4% year-to-date. That 10.4% return, however, masked the disparity in performance between its individual components. (UGA was an October hot spot).
- Natural gas is down sharply, at 60.7%
- Crude oil is up 7.2%
- Heating oil is up 20.9%
- Gasoline is up a whopping 77.5%. That’s seven times the return of the broad S&P GSCI, three times the return of the S&P 500 and nearly 140% better on an absolute basis than natural gas, says Hougan. (Are gas prices tied in with the ETF?). Yet UGA has attracted $5 million in inflows, compared with United States Natural Gas (NYSEArca: UNG), which lured in $4.9 billion.
It appears that gasoline is not the only overlooked investment. Lead and copper exchange traded notes (ETNS) are the top two performing funds in their class.
The moral? This isn’t about running out and buying into these commodities. Rather than looking at commodities or other asset classes that everyone else is talking about and buying, look around for other opportunities. You could be missing something big. (How to form a strategy).
For more stories about gasoline, visit our gasoline category.
- United States Gasoline (NYSEArca: UGA): up 83.9% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.