The industry's first crude oil exchange-traded fund has taken heat recently for allegedly being inappropriate for the average investor, and now the ETF community is firing back.
Refuting
Oil is also "the king of commodities," ETFzone.com adds, and its status can only grow as developing countries like China and India increase their energy demands.
USO might be too targeted for smaller investors, the website admits, but for larger portfolios like pension funds, "the control of having separate funds for each major asset class is attractive." The site further admits that USO is ripe for market-timers, who adversely impact long-term investors, but that's the case with any ETF.
Through funds like the USO, traders and passive investors can both achieve their separate goals while together lowering transaction costs and increasing liquidity, the website's rebuttal concludes. The key is to stick to one's own strategy and ignore the noise of journalists and analysts who might be in need of an education in portfolio theory.