I'll Take My Oil Without the Barrel, Please

• Better -- Oil-linked ETFs: Two new oil trusts, the U.S. Oil Fund(USO Quote) and the iPath Goldman Sachs Crude Oil Tracking Index ETN(OIL Quote) invest in oil futures and futures options, but they "roll" the contracts so that your bet isn't tied to any particular time period. Your investment is closely, but not exactly, tied to the price of oil. Futures prices will vary by market conditions, including volatility and other supply/demand considerations. And these investments throw off no cash return while costing 65 to 75 basis points (0.65%-0.75%) in management fees.

• Best -- Claymore MacroShares: Fund manager Claymore Securities took a clever approach to buying oil without buying oil. It simply set up two baskets of Treasury securities. Two funds, the Claymore MacroShares Oil Up Tradeable Shares (UCR Quote) and the Claymore Macroshares Oil Down Tradeable Shares(DCR Quote) trade side by side each day.

  If the price of oil rises, securities are transferred from the Down fund to the Up fund, adjusting the net asset values according to the oil price change. If the price runs to $120 a barrel, the Down fund is depleted, and the funds are terminated and paid out. Meanwhile, the Treasury securities pay a return, which is applied to the rather hefty 1.6% management fee, with the balance paid to you.

Now, I don't know about you, but I like the Claymore idea a lot. You can learn more at its Web site. It might be time to put some MacroShares Oil in my own investment back yard.