Over the past 90 days, the United States Oil Fund (NYSEArca: USO) has tumbled nearly 17%. Over the past six months, the ETF is lower by 23.4%, good enough to officially be in a bear market, and with a fourth-quarter loss of 2%, USO is not doing much to right its course.
None of that matters to investors eager to be early rather than late to a potential rebound in beleaguered oil futures. Somewhat defiantly, investors have been plowing cash into USO and rival futures-based oil exchange traded funds, so much so that USO is now a $1 billion ETF.
Since late June, USO’s assets under management have nearly doubled to $1.07 billion from $544 million, reports Gregory Meyer for the Financial Times.
Inflows to USO have accelerated in recent weeks. Despite being down 2% this month, USO has seen inflows of nearly $408 million. Investors have also been taking on risk with leveraged oil ETFs. At the end of the third quarter, the double-leveraged ProShares Ultra Bloomberg Crude Oil (NYSEArca: UCO) had $179.1 million in assets under management, according to ProShares data.
Since the start of the fourth quarter, UCO has added nearly $128 million despite tumbling 5.1%. That with West Texas Intermediate futures hovering near multi-year lows. Last month, Goldman Sachs downwardly revised its WTI crude oil futures outlook to $75 per barrel for the first quarter and second half of 2015 from $90 per barrel previously. The bank also believes oil prices will be weakest in the second quarter of 2015, with WTI prices down to $70 per barrel and Brent crude futures to hover around $80 per barrel. [Good Money After Bad With Oil ETFs]
Over the past month, the PowerShares DB Oil Fund (NYSEArca: DBO) has added $41.7 million in new assets, or 15% of its assets under management, a total surpassed by just 11 PowerShares over that period, according to issuer data.