Ditch These 3 Popular Oil ETFs and Consider Buying This 1 Instead
Oil prices have been extraordinarily volatile this year. Crude oil entered this year in the $60s before plummeting along with demand as governments restricted travel and nonessential businesses to slow the spread of COVID-19. At one point, the primary U.S. oil benchmark, West Texas Intermediate, crashed into negative territory. Oil has since staged an epic recovery -- including zooming a jaw-dropping 88% in May -- and was recently back around $40 a barrel.
All that movement is fueling an increase in speculative trades in the oil market. One of the main vehicles these traders are using is oil EFTs. Some of the most popular ones are United States Oil Fund (NYSEMKT: USO), ProShares Ultra Bloomberg Crude Oil ETF (NYSEMKT: UCO), and Direxion Daily S&P Oil & Gas E&P Bull 2X Shares (NYSEMKT: GUSH), which each rank among the 100 largest holdings on stock trading platform Robinhood.
However, those oil ETFs are incredibly risky, compounding the perils of investing in the volatile oil market. Investors should ditch those options and consider purchasing the Vanguard Energy ETF (NYSEMKT: VDE) instead. Here's why.
Source Fool.com
