We spoke about some stabilization that has entered the Crude Oil marketplace earlier this week as well as consistent inflows that are evident in the largest Crude Oil ETP tracker in the U.S. listed landscape, USO (U.S. Oil Fund, Expense Ratio 0.45%), which has added >$1.5 billion in new assets year to date.
USO is certainly not a perfect tracker for Crude Oil given much publicized contango issues in the underlying futures markets which have demonstrated deleterious effects on returns over time, but we still have to follow the flows given the size and presence of the fund in ETF land ($2.9 billion in overall AUM in the fund currently). While it has not moved much in recent sessions, it makes sense to keep the only futures based “Gasoline” ETF in sight, and this product is UGA (U.S. Gasoline Fund, Expense Ratio 0.60%), which is issued by the same company of course as USO, U.S. Commodity Funds.
UGA has been around since February of 2008, although it remains fairly notionally small with about $94 million in assets under management.
The fund averages more than 100,000 shares traded daily so it clearly does attract some daily play even though it has been mired in a trading range for the past month or so and is clinging to its 50 day moving average. Year to date the fund has attracted a respectable >$46 million in net inflows, and seasonally we have seen a pick- up in interest in this fund in the Summer months at times, particularly headed into the “Labor Day” driving and travel season.
For, if we look at a longer term chart in UGA we see that the fund traded with a $64 handle as recently as last June, before sinking rather sharply over the next six months on lower Crude Oil and Energy prices in general, bringing it as low as $28.60 in January of this year briefly.