Trader and author Dan Dicker says ETFs using futures to attempt to track commodity prices are "among the worst investments on the planet," and he urges retail investors to stay clear.
Dicker stopped by the Breakout set to talk energy trading and the way to play it at home, and he did not mince words when it came to futures-based ETFs. He says those issues fail to correlate to the price moves in the assets they track as well as the stocks of companies in the energy industry.
For investors looking to get long baskets of oil-related stocks in order to take advantage of what Dicker continues to see as a bullish move for crude, he suggests ETFs such as the Energy Select Sector SPDR (XLE), which holds a basket of energy-related shares in S&P 500 companies.
Supporting Dicker's point, crude oil has gained roughly 12.5% year to date compared with 13.7% for the XLE and the U.S. Oil's (USO) 5.7% gain.
Watch the video for more of Dicker's picks and pans.