As for the second part of arizona’s question, yes, contango has largely disappeared from the market since this spring. And true to form, USO has come closer to tracking spot oil. From April 1 to June 1, USO traded up 31%; over the same time period, crude oil rose 30.4%.

The problem is that if you bought in way back in December, those early losses are still haunting you.

Morningstar recently issued a statement calling for ETFs like USO and leveraged/inverse products to be regulated as derivatives. It said that individual investors who buy these products should be treated like investors who purchase options. Before you can buy or sell options from a brokerage account, you must agree that you’ve read a lengthy paper on how options work.

Similarly, Morningstar called for a revamping of the educational and licensing requirements of financial advisers to include coverage of these unique ETFs and how they work. Too many advisers are using these as a “backdoor” to get leveraged, short and commodity exposure into client accounts, it said, and those advisers should have to demonstrate expertise before they buy and sell.

I think I agree.

ETFs are tremendously empowering because they deliver institutional-caliber exposure to all investors. But clearly, not all investors understand these products well enough to use them properly. Investors are having sour experiences and losing money. It’s making them question the value of even true-vanilla ETFs. Education and revamped licensing agreements could be a first step toward correcting this.

Later this week, industry legend John Bogle will be making a presentation to the Journal of Indexes editorial board where he will, among other things, discuss some of the problems with ETFs.

Prior to the presentation, IndexUniverse.com will be hosting a free dial-in webinar with Mr. Bogle (register here) where investors can call in and ask Mr. Bogle any question they want.

I won’t be in New York for the actual board meeting, but I will be dialing into the webinar, and the questions I want to ask are these: Do we need to regulate leveraged, inverse and commodity ETFs? Have ETFs opened up too much of the market for investors?

Here’s the thing: I’ve been doing this for two years now, and still the emails pour in. All the information people need is out there, but still the rants occur.

The problem is that the wave of new investors pouring into ETFs is growing every day. Working in this industry, it sometimes feels like ETFs are the center of the investing universe. After all, they are one of the fastest-growing financial products in the world, and they increasingly dominate trading volume on the national exchanges.

But the truth is that most investors are still unaware of ETFs. We’re probably in the third or fourth inning in terms of investor pickup. A lot of new investors are coming to the space every day, and they’re making the same old mistakes that other people made in these leveraged and inverse ETFs.

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