Despite crude’s struggles, futures-based oil ETFs have recently been prolific asset gatherers. With inflows of over $445 million just this month, USO recently became a $1 billion ETF. 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.
Investors also have not been shy about taking on leverage with oil ETFs as highlighted by nearly $122 million of November inflows to the ProShares Ultra Bloomberg Crude Oil (NYSEArca: UCO). UCO had less than $180 million in assets under management at the end of the third quarter. [Cash Keeps Flowing to Oil ETFs]
However, it pays to remember that growth in USO’s assets and shares outstanding counts is also the result of some traders getting it right and shorting the ETF. One way of looking at that scenario is that even if oil prices keep tumbling it would be reasonable to expect USO to get bigger with a significant portion of that growth fueled by short sellers.
That strategy is likely to be rewarded today.
United States Oil Fund
