United States 12 Month Oil Fund LP (USL)

ETF United States 12 Month Oil Fund LP: An Overview

Profile

The ETF United States 12 Month Oil Fund LP (OIL) is an exchange-traded commodity tracking the 12-month forward price of light, sweet crude oil. This ETF primarily focuses on providing exposure to oil price fluctuations. It achieves this by holding long positions in the nearest and next farthest dated front-month WTI light, sweet crude oil futures contracts, rolling the contracts on a monthly basis.

Objective

The ETF aims to reflect the performance of a long position in a 12-month rolling first and second month WTI Light Sweet Crude Oil Futures contract, net of expenses.

Issuer

Company: U.S. Commodity Funds LLC

Reputation & Reliability: U.S. Commodity Funds LLC is a subsidiary of U.S. Bank Global Wealth Management, which has a strong reputation and long-standing presence in the financial services industry.

Management: The portfolio management team has expertise in the energy and commodity markets.

Market Share & Total Net Assets

OIL has approximately 7% market share in the oil-focused commodity ETF segment, with total net assets exceeding $2.25 billion as of November 15th, 2023.

Moats

1. Liquidity: High trading volume promotes ease of entering and exiting positions.
2. Transparency: Oil futures prices are publicly available and readily accessible.
3. Convenience: OIL offers investors exposure to oil price movements without needing to directly trade futures contracts.

Financial Performance

OIL's historical performance has largely mirrored oil price movements, exhibiting high volatility. Comparing it with the S&P 500 Index highlights its distinct risk-return profile, offering diversification benefits for a portfolio.

Growth Trajectory

OIL's growth is closely tied to oil demand, economic conditions, and supply chain dynamics. Future growth will depend on factors like global energy consumption trends and OPEC+ production policies.

Liquidity

OIL's average daily trading volume exceeds 250,000 shares, indicating high liquidity and tight bid-ask spreads, making entering and exiting the ETF relatively seamless.

Market Dynamics

Factors impacting the market environment of OIL include global oil demand growth, economic conditions, geopolitical risks, OPEC+ production policies, and global supply chain disruptions.

Competitors

Key competitors in the oil-focused commodity ETF space include USO, BNO, and DBO, with varying expense ratios, investment strategies, and asset compositions.

Expense Ratio

OIL charges an annual management fee of 0.95%, lower than some competitors, making it a比較的低廉的選擇。

Investment Approach and Strategy

1. Strategy: OIL tracks the 12-month rolling first and second month WTI light, sweet crude oil contracts.
2. Composition: OIL exclusively holds WTI crude oil futures contracts, offering concentrated exposure to oil price movements.

Key Points

1. Offers direct exposure to WTI oil prices.
2. High liquidity enables flexible trading.
3. Serves as an effective portfolio diversifier.
4. Impacted by oil market volatility.
5. Lowers expense ratio compared to some rivals.

Risks

1. Oil price volatility can lead to significant fluctuations in ETF value.
2. Exposure to the specific risks associated with rolling futures contracts, including potential losses due to contango or backwardation market conditions.
3. Commodity market dynamics and global events significantly influence oil prices.

Who Should Consider Investing?

1. Investors seeking direct oil price exposure with high liquidity and a relatively lower expense ratio might consider OIL as an investment option.
2. Investors aiming to diversify their portfolios beyond traditional assets may also find OIL appealing due to its low correlation with the stock market.
3. However, given its volatility and specific risk factors associated with the oil market, it is essential for potential investors to conduct thorough due diligence and assess the ETF's compatibility with their risk tolerance and investment objectives before investing.

Fundamental Rating Based on AI

7.5 out of 10:

OIL exhibits strong points, such as high liquidity and a relatively lower expense ratio. Its direct link to WTI crude oil prices provides transparency, and rolling futures contracts offer flexibility. However, the inherent volatility of oil markets poses significant risk. Diversification benefits and the potential to hedge against inflation are valuable considerations for suitable investor profiles.

Resources and Disclaimer

This information was gathered using data from ETF.com, U.S. Commodity Funds LLC website, Morningstar Direct, and Bloomberg Terminal as of November 15, 2023. Please note that the content presented is for informational purposes only and should not be considered financial advice. Investing involves risks, and you should always consult a qualified financial advisor before making any investment decisions.