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 recent media and analyst reports, claims that, in small doses, the new United States Oil Fund (USO) from Victoria Bay Asset Management in Alameda, Calif., could actually mitigate risk in a large, stock-heavy portfolio. Sure, as a standalone asset class, oil is one of the most volatile commodities on the market. But according to modern portfolio theory, an uncorrelated asset helps lower overall portfolio risk, the San Francisco-based website argues.

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