USCF Investment President Talks ETFs, Future of Oil

Exchange-traded funds have been sweeping the financial markets since their inception more than 20 years ago. Just 10 years after ETFs first hit the market, the United States Oil Fund (USO) was created by USCF Investments, giving average investors the opportunity to add oil exposure to their portfolios. At the time it was first oil ETF, but now it’s one of many.

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Tuesday, USCF Investments celebrated USO’s 10-year anniversary. The company has designed and issued more than 12 specialty ETFs across commodity and equity asset classes.

While average investors might be concerned about getting involved in the markets, USCF Investment President and CEO John Love contends ETFs provide a great starting place.

AFter a run higher this summer, oil prices hit a snag on Tuesday, falling to a three-month low, causing investors to wonder when or if the trend will reverse.

“It’s going to be under pressure for a while,” Love said.  “As we’re coming toward the end of the summer, some of the optimism from the start of the year is fading.”

When looking for portfolio diversification, Love said equity ETFs provide a lot of benefits.

“[They] are defiantly tax efficient… instead of buying and selling stocks yourself, the ETF does it with market makers, so the tax burden is reduced," he said.

Still, investing in ETFs is not without risks, especially as oil continues to be under pressure. Love said that the last two years alone have been especially troubling “depending on how the fund is structure, using futures contracts, there are some mechanisms that can weigh on returns.”