Wednesday, May 11, 2011

United States Oil Fund (USO)

This article from the Wall Street Journal discusses how poorly the United States Oil Fund has performed (up 19%) versus the commodity it is supposed to track, the price of a barrel of West Texas Intermediate crude oil (up 123%) since the beginning of 2009.  It just goes to show you that you can try to use ETFs (exchange traded funds) to attempt to track the performance of an actual commodity, but the performance results that you receive may not be what you expected.


http://online.wsj.com/article/SB10001424052748703864204576317481454589652.html?mod=djemheard_t

Exchange traded funds are mutual funds that trade on an organized stock exchange, such as the American Stock Exchange.  Unlike regular mutual funds, whose prices are established at the end of each trading day, and which can only be traded once per day, ETF prices float throughout the day and can be traded during normal business hours for the stock exchanges.

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