# US Gasoline ETF - UGA



## Spidey (May 11, 2009)

Anyone have an opinion on this one? I've been watching it but don't own it. It doesn't always seem to follow the price of gasoline as closely as I would expect but it has been on a fairly steady upward climb over the past 5 years. MER seems a bit pricy for an ETF at 0.88%.

I've never met anyone who believes that the price of gasoline is going down over time. Would this be a good way to profit from that? Are there any better alternatives to this fund?


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## james4beach (Nov 15, 2012)

The commodity ETFs generally under-perform the actual commodities. This article mentions that UGA under-performed actual gasoline futures during periods of contango.

Another risk with a commodity ETF such as this one is that it's possible the government or regulator will put in place maximums on futures ownership to try to prevent speculators from affecting energy markets. Here's an article.

Before getting into something like this you should remember that the government could yank the rug out from under you by changing the rules on how energy futures can be used.


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## sylyconvalley (Apr 22, 2013)

spidey.
UGA actually owns and rolls futures contracts of RBOB for what i briefly read.
atm u have a slight backwardation which favors the fund.
this backwardation like the oil backwardation in oil futures IMO will eventually sdisappear.
i could be wrong though.
just like UNG it suffers from decay in the long run.
it is a short term instrument of investment.
i am linking the CME delayed quotes for RBOB for your purposes.
gasoline has been trading lower in futs mkts recently by the way.
link below.delayed obviously
cheers.

http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline_quotes_globex.html


p.s 

RBOB futs can be extremely volatile also.
just like natural gas by the way.... a lil less intense but highly volatile.


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## james4beach (Nov 15, 2012)

Resurrecting this thread. UGA is now half the price it was when this thread started.

I'm interested in UGA. It seems to have done a fine job of tracking the actual commodity price, unlike for example crude oil ETFs which have under-performed oil for the long term.

For example from 2008-05-01 until today, UGA has -52% total return. The corresponding spot price using $GASO on stockcharts, is down -50% in the same period. That's a pretty good match. Interesting, UGA exhibited a huge premium versus $GASO in 2013-2015, which is gone now.

What do people think about this one? Part of my thinking is that gasoline has consistently done better than crude oil.


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## mreconomic (Apr 13, 2016)

A finished good it will always be more expensive than raw materials involved... But both move together since you need oil to produce gasoline... Now it is time to invest in oil, because it already hit bottom prices... and keeps moving up since. 

Small oil companies have been very affected by cheap prices... now that will recover these companies will be the most benefitiated from it. 

Anadarko, Valero, Marathon... these kind


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## james4beach (Nov 15, 2012)

That's a good point. Crude oil and gasoline do move together. Here's a long term chart showing crude (blue) and gasoline (green). Same long term performance, though I'd add that gasoline appears to be less volatile so might be a better way to get exposure with less volatility:
http://stockcharts.com/h-sc/ui?s=$GASO&p=D&st=2006-01-01&en=(today)&id=p97317323624

Bigger picture though, I'm not sure oil has bottomed.


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## lonewolf (Jun 12, 2012)

Could not find link .

Gasoline has best commodity seasonality track record according a write up on internet which was not recent & could not find again.
26 out of 27 trades profitable buying March 1st selling half on May 1st other half on May 15


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## james4beach (Nov 15, 2012)

Anyone thinking of buying UGA for a short term trade on gasoline market impacts due to the Texas deep freeze?

UGA is 30.41 right now

Gasoline has been in a 4 month uptrend. I wonder if this event could cause a price jump. Then again, perhaps it's already been priced in / hedged using derivatives.


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## doctrine (Sep 30, 2011)

I don't know what returns UGA offers, but fundamentally it is virtually certain (in my opinion) that gasoline is going up from now until the summer. Gasoline stocks are below where they were a year ago, and there is going to be a lot more demand in the coming months. Gasoline typically peaks in May/June. The refinery outages in the US won't help. Gas prices can rise quite a bit in a shortage scenario. There is some reporting that refineries have been putting off maintenance as well and will have to reduce output in the next few months - some may stay offline longer now to get that done I suppose.


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