The first U.S.-listed oil exchange-traded fund is expected to appear on the
The United States Oil Fund will trade under the symbol "USO" and be managed by Victoria Bay Asset Management of Alameda, Calif., according to MarketWatch.
The newest in a wave of ETFs based on commodities, the oil fund will track crude-oil prices, allowing investors to buy into the resource itself, rather than shares of broader category mutual funds or a specific energy company.
The fund will invest in energy futures contracts and options, and will hold short-term Treasury Bonds. The goal is for shares' performance to follow the spot market prices for West Texas Intermediate (WTI), a type of oil characterized as "light" and "sweet" and used as the benchmark in the U.S. markets.
USO share prices will reflect closing prices of near-month oil futures contracts on the
Macro Securities Depositor of Morristown, N.J., has also filed an application for an oil EFT, this one tracking Brent crude oil, a heavier type most commonly associated with Northern Europe.
Paul Mazzilli, an analyst with
Oil ETFs may also be less tax efficient than stock funds because of the way tax law treats gains on futures contracts, Culloton said.
Alex Reiss, vice president of
Like Culloton, Reiss warned, "oil prices are very volatile, and investors shouldn't overly concentrate their portfolios in one asset class or fund."