UNL vs USO

UNLFUnited States 12 Month Natural Gas Fund, LP

USOBUnited States Oil Fund, LP

In short

UNL Natural gas without the front-month tunnel vision. Since 2009, UNL has tracked an equally weighted ladder of 12 consecutive NYMEX gas futures, spreading the roll across a year instead of riding the next contract alone.

USO The original US crude oil ETF, trading since 2006 and still one of the busiest ways to get WTI exposure without opening a futures account. It holds oil futures near the front of the curve, not barrels in a tank.

Stated mandate

UNL UNL seeks to reflect changes in the spot price of natural gas delivered at Henry Hub, Louisiana, using an equally weighted average of 12 consecutive natural-gas futures contracts, plus collateral interest and less expenses.

USO USO seeks daily NAV percentage changes that reflect changes in the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, measured by the Benchmark Oil Futures Contract, plus collateral interest and less expenses.

Why people hold it

• UNL The ladder is the point: 12 consecutive monthly contracts, equally weighted, so roughly a twelfth of the book rolls at a time instead of the whole position every month.sec.gov
• The target is unambiguous: the spot price of natural gas at Henry Hub, Louisiana, measured through those 12 futures. Passive and rules-based, with no manager calls on gas.sec.gov
• Trading since 2009 through several gas cycles, and USCF runs the same 12-month ladder on the oil side (USL), so the structure is well worn rather than experimental.sec.gov

• USO Cheap for this corner of the market: 0.86% a year against a cohort median of 1.08%.
• Live since 2006 and one of the most actively traded funds in its category, so bids and offers are usually there when you need them.
• Targets daily moves in light, sweet crude delivered to Cushing, Oklahoma, via its benchmark futures contract. No margin account, no expiries to roll yourself.sec.gov
• Since April 2020 the portfolio has reached past pure front-month into later-dated contracts, a change the fund disclosed in its filings.sec.gov

Worth knowing

• UNL The fee runs 1.65% a year, the high end for energy futures pools, and this is a small fund next to front-month names in the group like OILK and USO.
• A commodity pool limited partnership, not a 1940 Act fund, so tax time brings a Schedule K-1 instead of a 1099.uscfinvestments.com
• The ladder cuts both ways: spreading across a year softens roll costs and also softens how much a sharp move in front-month gas shows up in the fund.sec.gov

• USO It's a commodity pool, so tax season brings a Schedule K-1 rather than a 1099. Peer OILK is built specifically to skip that paperwork.uscfinvestments.com
• Futures, not barrels. Rolling contracts forward can cost when later months trade above nearer ones, which pulls results away from headline spot oil.sec.gov
• One commodity, one price driver, and no income stream: the fund hasn't been paying distributions, so everything rides on the oil move.

Full UNL profile⁠

Full USO profile⁠