United States Gasoline Fund (UGA)
This week, our sector pick is the United States Gasoline Fund (UGA). This picks fits in well with my model which looks for sectors in an uptrend that have recently shown weakness. This commodity fund is part of the energy sector. As many of you know, gas prices have been climbing in recent weeks and months creating a real cause for concern for consumers having to cut back on other spending. This ETF can help provide a hedge against the rising prices over the short term. Gas price increases can be blamed on political tensions in the mid east and growing demand of emerging markets.
United States Gasoline Fund tracks movements in gasoline prices. This fund was launched on February 26th 2008. It has an expense ratio of 0.90% and has an average daily trading volume of 133 thousand shares. The majority of the fund’s holdings are gasoline futures contracts based on RBOB gasoline which is reformulated gasoline blend stock for oxygen blending.
David Cohne, is Senior Advisor, Investment Strategy at ETF Radar. You can reach him directly under davidcohne [at] etfradar.com