With gold being the major growth story in the commodity world, oil's ascent to $144 per barrel in July of 2008 is a distant memory. However, since bottoming in February 2009, oil has regained some of it previous glory to currently sit around $83. As the economy recovers, industries with start increasing their oil consumption, which will cause the price of oil to bubble up. Let's take a look at a few oil focused exchange-traded funds (ETFs) that could be good additions to your portfolio in the mean time.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

ETF Current Price YTD % Return Expense Ratio Total Assets
United States Oil ETF (ARCA:USO) $31.41 (18.39)% 0.65% $1.21B
PowerShares DB Oil ETF (ARCA:DBO) $23.86 (16.80%) 0.75% $503.89M
U.S. 12 Month Oil ETF (ARCA:USL) $36.98 (15.46%) 0.85% $108.4M

SEE: A Guide To Investing In Oil Markets

Crude Focus
The PowerShares DB Oil ETF is currently down the second least among the ETFs listed above in terms of returns since the beginning of the year. The DBO fund is composed of futures contracts on light sweet crude oil (West Texas Intermediate). DBO's 0.75 percent expense ratio is well above the 0.09 percent an investor would pay for the SPDRS S&P 500 Index Fund (NYSE:SPY), and it is the one of the cheapest among its peers.

Crude Oil Plus
The U.S. Oil ETF also tracks the performance of light, sweet crude oil (WTI). In addition to holding futures contracts on light sweet crude oil, the USO fund may also invest in non-negotiated contracts with less liquidity than futures contracts and in taxable money market funds like the Goldman Sachs (NYSE:GS) FS Government Select. Leading the group of oil ETFs in terms of total assets, the USO fund has the lowest expense ratio of 0.65%.

A Dozen in the Other
The U.S. 12 Month Oil ETF tracks the performance of light, sweet crude oil (WTI) by calculating the daily movement of the average price of 12 futures contracts on crude oil.

SEE: Fueling Futures In The Energy Market

Final Thoughts
Oil futures can be a volatile addition to any portfolio, so it's helpful to understand available ETF options that investors can choose from in order to capture the future upward movement of oil prices.

SEE: Oil And Gas Industry Primer

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Insurance

    Whole or Term Life Insurance: Which Is Better?

    Learn the difference between term life insurance and whole life insurance. Understand when it is beneficial to buy each type of life insurance.
  2. Mutual Funds & ETFs

    ETF Analysis: iShares 10-20 Year Treasury Bond

    Learn about the iShares 1-20 Year Treasury Bond ETF and its holdings, and understand why investors may be better served to look at other bond funds.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares Global Telecom

    Learn about the iShares Global Telecom exchange-traded fund, which invests in U.S. and foreign telecommunication companies with high dividend yields.
  4. Chart Advisor

    Gold Struggles to Climb Higher and May Fall Soon

    Traders will be watching the price of gold over the coming weeks. We'll take a look at how a couple major moving averages are suggesting that the next move could be lower.
  5. Mutual Funds & ETFs

    ETF Analysis: United States Brent Oil Fund

    Learn more about the United States Brent Oil exchange-traded fund, the characteristics of the fund and the suitability and recommendations of it.
  6. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Bloomberg Crude Oil

    Find out more about the ProShares Ultra Bloomberg Crude Oil ETF, the characteristics of UCO and the suitability and recommendations of UCO for investors.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Hong Kong

    Learn about the iShares MSCI Hong Kong fund, which invests in various equities of companies listed on the Hong Kong Stock Exchange.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Growth

    Take a close look at the Vanguard Small-Cap Growth ETF, which focuses on domestic small-cap equities with a fundamental growth strategy.
  9. Mutual Funds & ETFs

    ETF Analysis: First Trust Dorsey Wright Focus 5

    Take a closer look at the First Trust Dorsey Wright Focus 5 ETF, a unique and innovative fund of funds based on momentum and relative strength.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares National AMT-Free Muni Bond

    Take an in-depth look at the iShares National AMT-Free Municipal Bond ETF, a highly diverse and very popular muni bond fund.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  4. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  5. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  6. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  4. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!