The Amex struck black gold Monday with the release of the first U.S.-listed exchange-traded fund designed to track the price of oil.

The United States Oil Fund ( USO) began trading Monday morning, opening at a price of $68.25, which was the closing price of the May oil futures contract on the New York Mercantile Exchange. Victoria Bay Asset Management, an Alameda, Calif., commodity-pool operator, will manage the new fund.

The objective of the USO is to reflect the spot price of West Texas Intermediate light, sweet crude delivered to an Oklahoma-based storage facility. The fund will invest in oil futures contracts traded on the New York Mercantile Exchange or other U.S. and foreign exchanges. It will also hold other interests, such as cash-settled options and forward contracts, in order to gain exposure to the price of oil.

Although the USO is traded on an exchange and can be sold short like an ETF, it is technically structured as a commodity pool, not a mutual fund.

In this way, the fund is reminiscent of the DB Commodity Index Tracking Fund ( DBC), which was launched in February of this year. The DBC offers investors the ability to track the Deutsche Bank Liquid Commodity index, a fairly energy-heavy index in its own right, with crude oil comprising 35% of the fund, followed by 20% heating oil, 12.5% aluminum, 10% gold and 11.25% in both corn and wheat.

In terms of collateral, the DBC is backed by short-term Treasury bills. The yield generated from the fixed-income portion of the fund is used to offset the fund's fees, which are comparatively cheap at 95 basis points.

The USO will also hold Treasuries as collateral, but it carries a lower expense ratio of 50 basis points. Brokerage fees aren't included.

A Golden Gusher?

The boom in prices of commodities like oil and precious metals has caused a stampede among ETF providers desperate to turn hard assets into investor-friendly funds and, more importantly, gain first-mover advantage.

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