We review the relative short term performance of the USO ETF in tracking the Oil Futures market, and it fails miserably as a proxy for the oil market.
The existence of these failed class of instruments is enabled by the reluctance of brokerages to offer futures contracts to their clients. How long has Fidelity had their customers investing in these garbage proxies through the years because they had no other options within their brokerage services?! It is about time regulation shuts these garbage instruments down.
If you are going to offer a product or service, basic competency is a must, especially as an investment vehicle as it is hard enough to just get the direction right of an asset, an investor doesn`t need the additional stress of having the investment instrument itself being flawed.
Especially when the SEC has had 10 years in the case of the USO to review the performance of this ETF, and close it down due to massive incompetence as an acceptable proxy for the oil market. This goes the same for all the other boatload of ETF offerings of the last 15 years, where have the regulators been in the review process?
The obvious takeaway is that investors can never count on regulators, exchanges, members of the investment community, etc. to protect their interests. Just assume that everyone out there is trying to scam you as an investor. Distrust everything, Caveat Emptor - Let the Buyer Beware. Just assume that you are the mark at the investing table so to speak, and avoid being the sucker by being highly skeptical of every investment vehicle until proven otherwise.
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