With $858 million in assets, USO’s shares currently trade at a modest premium (0.14%) to their net asset value (NAV). Due to the steep decline in the price of oil, shares are currently near the low end of their 52-week range of $20.53 to $39.44. USO has declined by 40% year-to-date, again mirroring the price of crude. However, USO’s costs are low at 0.72%. That’s among the lowest in the sector. USO’s share price should rise with oil in 2015.
2015 Best Oil ETF No. 2: PowerShares DB Oil ETF (NYSE Arca: DBO) tracks the price and yield performance of the Deutsche Bank Liquid Commodity Index using futures investments over various time frames. The index mirrors the percentage change in WTI crude prices. DBO has an average daily volume of just over 1.3 million shares, so it is highly liquid.
The fund’s assets total around $239 million, and DBO has traded within 0.5% of its NAV lately. Its expenses are reasonable at 0.75%. DBO was down 44% in 2014, and it’s still trading near the low end of its 52-week range. At that discount, DBO can offer more upside than other funds when oil starts to rebound.
DBO opened today at $14.09.
2015 Best Oil ETF No. 3: ProShares Ultra DJ-UBS Crude Oil (NYSE Arca: UCO) tracks the Dow Jones UBS Crude Oil Sub-Index, which also reflects the price of WTI crude oil. However, it uses leverage in the form of swaps, forward contracts, options, and futures to seek percentage results roughly twice as large as the changes in crude itself.
This is the most popular of the leveraged funds, with an average daily volume of 2.8 million shares. The effects of the leverage are evident in the more volatile trading range, which can rise and fall 10% or more in a day. USO has $331 million in assets, and expenses are 0.95%.
UCO opened today at $8.47, and has a 52-week range of $7.97 to $40.17.
2015 Best Oil ETF No. 4: Market Vectors Unconventional Oil & Gas ETF (NYSE Arca: FRAK) seeks to replicate the performance of the Market Vectors Global Unconventional Oil & Gas Index. The index is made up of companies involved in the exploration, development, extraction, and/or production of unconventional oil and natural gas. That includes coal bed methane, coal seam gas, shale oil, shale gas, tight natural gas, tight oil, and tight sands.
With just over $62 million in assets and a daily trading volume of 66,000, this is the smallest oil ETF on our list. Unlike the others, it has a small yield of 0.62% and rock bottom fees (0.54% net, due to a 0.5% waiver that expires May 1, 2015). It currently trades at a small premium of 1.44% to NAV. In 2014, the fund was down nearly 23%. It opened today at $21.08.
The Bottom Line: These oil ETFs will be the biggest winners as crude oil prices rebound in 2015. Because of the dip in the price of oil, they trade at huge discounts, for now.
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