A better idea is the U.S. 12-Month Oil ETF (NYSEArca: USL), which holds front month oil contracts along with futures contracts for the following 11 months, allowing the fund to damp out the adverse impact of contango.
Using Wednesday’s closing prices, the USL/GLD is just under three, meaning less than three shares of USL are need to buy one share of GLD. The ratio reached four in September 2012. Over the next month, both ETFs traded lower, with USL the worse offender with a roughly 10% loss.
U.S. 12-Month Oil Fund
ETF Trends editorial team contributed to this post. Tom Lydon’s client own shares of GLD.