Tuesday, January 12, 2010

Which One is Better: USO, USL, UGA, UNG?

Back in 2008 we reported on the performance of UGA vs USO and why UGA was the better choice at that time.

Clearly UGA was the better choice, in spite of the recent recovery in oil price.

However, as you can see, both lost money since early 2008 - for a buy & hold strategy. So could we do better?

Because INO's tool had done so well on its alerts on USO, I looked at backtesting of all the energy 'U' ETFs: They are:

  • UGA: Gasoline fund
  • USO: Oil fund
  • UNG: Natural gas
  • USL: Oil 12 month
Here is the performance summary of $10k invested into each of the ETFs, with all the buy and sell alerts triggered:

Performance tables:

(please click to enlarge)

On all four ETFs, USO, UGA, UNG, and USL, the alerts given were quite successful. The average ROI was 105.11%, compared to a very poor -45.8% of buy and gold. These are really good results, quite impressive, the alerts given by the tool are clearly suitable for these ETFs in the long term.

The highest ROI using buy and sell alerts was for USO at +159%. The worst performer was UNG at +72%.

In comparison, the highest performer of the buy & hold strategy was UGA at -33%!

Here are charts showing the buy and sell given in graphical form:





Red are sell, and green are buy, monthly alerts (they are called triangles).

You can get the alerts yourself on any stock or ETF by running the INO tool. To get access use this link for a risk-free trial. Then you can do your own due diligence!

Note that to compute returns, we assume that all ETFs were sold at the last day, no sell alerts were necessarily given that day.

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