5. United States Oil Fund LP
The United States Oil Fund (USO +2.87%) is an ETN that provides investors with more direct exposure to oil prices. It invests in futures contracts based on WTI prices. This approach allows investors to make a directional bet on the price of oil without having to engage in futures trading or risk that an oil stock investment will underperform the price of crude oil.
However, the fund has a rather hefty total expense ratio of 0.7%. The costs of rolling futures contracts can also eat into the fund’s return over the long term, causing it to lag the price of oil over longer periods.
Because of these drags on performance, the oil ETF isn’t an ideal long-term investment. Instead, it’s best for making a short-term wager on crude oil prices since it tends to do a good job of tracking WTI prices over short periods: