If you want to cover a wide swath of major energy commodities, the remaining holdout of the four biggest segments became available on Wednesday with the launch of an exchange-traded fund focused on heating oil.

The United States Heating Oil Fund (AMEX: UHN) tracks the changes in price of the commodity as measured by futures contracts traded on the New York Mercantile Exchange. It invests in so-called near-month contracts set to expire-except when the near-month contract is within two weeks of expiration, in which case it will invest in the next month.

"Structurally, it works the same as the oil and gas ETFs we've helped bring to market," said John Hyland, chief investment officer at Victoria Bay Asset Management, which is marketing UHN.

At the end of February, Victoria Bay brought out the United States Gasoline Fund (AMEX: UGA). Like UHN, it was the first of its kind and represented the third of four major energy commodities sectors covered by the firm's ETFs.

"Heating oil is another key energy segment that deserves representation," Hyland said.

The company was first-to-market in crude and natural gas ETFs, with the United States Oil Fund (AMEX: USO) launching in April 2006 and the United States Natural Gas Fund (AMEX: UNG).

Victoria Bay is registered as a commodity pool operator and has $1.1 billion in assets under management as of December 31, 2007.

Besides being first-to-market, UHN will share with its other three sister energy ETFs exposure to the possible impact of backwardation and contango. But it'll differ from others like the United States 12-Month Oil Fund (AMEX: USL), also a Victoria Bay ETF. It spreads investments over a longer time frame, aiming to lessen the impact of contango and related market forces.

But the new ETF, like its other straightforward sister funds that buy near-month contracts rather than longer-term futures, UHN can take advantage of something called crack spreads. Those open up in the market as oil-based products move through the refining process. A spread essentially measures the difference between profit margins when a barrel of oil is first handled to when it becomes a final product such as heating oil or even gas for a car or truck.

Since UHN is designed to buy near-term futures, it launches at a time when such crack spreads are at historically high levels. For example, on the New York Mercantile Exchange, heating oil spreads are running as much as $22.50. As summer approaches, some gas cracks for August contracts are trading with values of up to $7.50.  

Investors in UHN will be able to take advantage of interest income as well. Like other commodities ETFs, it only needs to use a portion of the fund's available reserves to buy full futures positions. That leaves any excess cash free to invest in high-yielding yet secure fixed-income bonds such as longer-term Treasuries.