danshirley
Registered: Jul 2004
Posts: 415 |
07-11-12 12:14 PM
USO and USL are simply not the same thing. USO is a diverse holding of futures including gasoline and natural gas. USL is a much more focused holding of futures:
USO:
The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.
Top 10 Holdings (43.33% of Total Assets)
Company........................................% Assets
Morgan Stanley Inst Liquidity Gov Ins.....17.68
Goldman Sachs FS Government Sel..........12.06
Future Contract On Wti Crude Future....... 8.22
Fidelity Instl MM Fds Government..............5.37
USL:
The investment seeks to replicate the changes in percentage terms of the price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the average of the prices of 12 futures contracts on crude oil traded on the NYMEX. The fund will consist of the near month contract to expire and the contracts for the following eleven months, for a total of 12 consecutive month's contracts. When calculating the daily movement of the average price of the 12 contracts each contract month will be equally weighted
Top 10 Holdings (66.11% of Total Assets)
Company.................................................... % Assets
Morgan Stanley Inst Liquidity Gov Ins.............. 19.05
Fidelity Instl MM Fds Government I.................. 12.64
Future Contract On Wti Crude Future Jul12........ 4.31
Future Contract On Wti Crude Future Feb13...... 4.30
Future Contract On Wti Crude Future Jan13....... 4.30
Future Contract On Wti Crude Future Nov12...... 4.30
Future Contract On Wti Crude Future May13...... 4.30
Future Contract On Wti Crude Future Oct12....... 4.29
Future Contract On Wti Crude Future Sep12...... 4.29
Nor is contango some sort of crime:
http://en.wikipedia.org/wiki/Contango
"A contango is normal for a non-perishable commodity that has a cost of carry."
USO and USL are both intended to be held for short periods of time and for short periods of time they behave very closely:
http://finance.yahoo.com/q/bc?s=USO...f&z=l&q=l&c=usl
The fact that they behave so closely for periods up to a year is actually surprising to me:
http://finance.yahoo.com/q/bc?s=USO...f&z=l&q=l&c=usl
For longer times they will, not surprisingly, diverge:
http://finance.yahoo.com/q/bc?s=USO...f&z=l&q=l&c=usl
They and a number of other ETF's are meant to provide traders who normally trade stocks and stock options commodity exposure. I find them useful and have used them and their options when appropriate. Their lack of correlation with the S&P 500 can present opportunities for unique trades.
http://finance.yahoo.com/q/bc?t=1y&...&ql=1&c=%5EGSPC
:-)
|
