Thanks to Russia’s economy being overly reliant on fossil fuels, the war in Ukraine and the subsequent hit to Russia’s oil exports, oil has been one of the few asset classes that have benefited from the war. With Russia’s spigot turned off, for now, Europe and the rest of the region will need to get their oil from elsewhere.
For those not interested in betting on individual oil stocks, oil ETFs allow investors to profit from the rapidly rising price of oil. Owning an oil ETF could also be a way to hedge against the very expensive cost of filling your tank with gas every week.
Below are five ETFs that investors should consider adding to their portfolios in 2022.
Offering investors exposure to the spot price of Brent crude oil, the United States Brent Oil Fund primarily invests in crude oil futures contracts and other oil-related contracts. The fund has $316.1 million in assets under management (AUM), a 1.02% annual fee, and a healthy 1.4 million shares traded daily.
United States Brent last traded at $35.74 per share, up +0.34% on the day. YTD, BNO ETF is up +68.90%.
The Invesco DB Oil Fund is tied to crude oil through WTI futures contracts. The fund tracks the DBIQ Optimum Yield Crude Oil Index Excess Return, an index composed of WTI futures contracts. The fund has $540.2 million AUM, an annual fee of 0.77% and an average daily trading volume of 1.1 million shares.
Invesco DB Oil Fund last traded at $20.66 per share, up +0.05% on the day. YTD, DBO ETF is up +50.36%.
Providing exposure to the Barclays WTI Crude Oil Pure Beta TR Index, iPath Pure Beta Crude Oil ETN is perhaps the most direct access to investing in WTI via an ETF. They have $139.7 million AUM, charge a relatively low annual fee of 0.57, and only trade 75,000 shares daily.
iPath Pure Beta Crude Oil ETN last traded at $38.46 per share, down -0.62% on the day. YTD, OIL ENT is up +62.55%.
More focused than the other funds on this list, the United States 12-Month Oil Fund is tied to the price of West Texas Intermediate’s light, sweet crude oil. The contracts they invest in are restricted to those with 12 months or less to expire. The fund has $143.7 AUM, an expense ratio of 0.8% and the lowest liquidity on this list, with only 48,000 shares traded per day.
United States 12 Month Oil Fund last traded at $44.61 per share, up +0.2% on the day. YTD, USL ETF is up +58.14%.
By far the largest fund on this list, the United States Oil Fund is the largest oil-focused ETF on the market. It is tied to the Benchmark Oil Futures Contract, which is the contract due to expire next. USO has $2.9 billion AUM, a yearly fee of 0.81% and strong liquidity of 5,000 shares traded daily.
United States Oil Fund last traded at $89.71 per share, down -0.47% on the day. YTD, USO ETF is up +63.61%.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks mentioned in this article.