Ok, the obvious advantage of OIH is no fees, as was pointed out in another thread. Question remains though, why not go with XES? It has a lower minimum investment requirement (OIH requires minimum of 100 lots per order) and it has exceedingly better positive correlation to front month crude futures than OIH, sometimes by a factor of 2x! I guess one advantage of OIH is that it's static and never changes with the exception of corporate actions, where as XES tracks an underlying index. This could be a tax advantage perhaps, although just as easily XES could claim the advantage that it will retain better tracking of the industry, and perhaps that is why it has better correlation (haven't researched this thought yet). Other notables are OIH having much higher daily volume with 7.4M vs. 250k for XES, and 2.3B in assets vs. 300M for XES. So clearly XES is traded thinly by comparison. Thoughts?
Ignore my point about correlations being better for XES to CL, that was an error on my part as I was looking at the wrong chart. Correlations are actually slightly stronger for OIH to CL most of the time, but not substantially so.