The Best Oil ETFs for 2023

Retail investors curious about investing in oil have a few options – they can invest in oil companies that benefit from high oil prices or, if they want more direct exposure, they can trade oil futures. But futures trading can be complicated and risky for inexperienced investors, making an oil ETF a more affordable way to gain direct exposure to oil prices.

Oil prices, as measured by the Bloomberg Composite Crude Oil sub-index, have fallen 26% over the past 12 months, significantly underperforming the S&P 500, which gained 20%.

There are six distinct oil commodity ETFs that trade in the United States, excluding inverse and leveraged ETFs, and funds with less than $50 million in assets under management (AUM).

Below we look at the oil ETFs with the best 12-month performance, lowest fees and highest liquidity. All numbers are from June 16.

• One-year performance: -25.8%
• Expense rate: 1%
• Annual dividend yield: N/A
• Three-month average daily volume: 691,100
• Assets under management: $184 million
• Date of establishment: June 2, 2010
• Issuer: USCF Investments

The BNO is structured so that the daily percentage change in the Brent crude oil spot price is reflected by the percentage change in the net asset value (NAV) of the BNO. The fund’s benchmark is the near-one-month futures contract, unless that contract is within two weeks of expiration, in which case the benchmark is the next-month contract. BNO mainly invests in Brent Crude futures, but may also invest in forwards and swaps.

• One-year performance: -26.6%
• Expense rate: 0.6%
• Annual dividend yield: N/A
• 30-day average daily volume: 3,946,679
• Assets under management: $1.67 billion
• Date of establishment: April 10, 2006
• Issuer: USCF Investments

The USO is structured as a group of commodities and is meant to reflect the percentage change in the spot price of West Texas Intermediate, a light sweet crude oil delivered at Cushing, Oklahoma, that acts as the reference price for US crude. The contract is traded on the New York Mercantile Exchange (NYMEX). USO invests in other oil-related contracts and may invest in forward and swap contracts.

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As of this writing, the author does not own any of the above ETFs.