An ETF is a type of fund that collects assets and trades them throughout the day as a sort of “package deal” — in much the same way individual stocks are traded. Therefore, an oil ETF focuses on the oil industry and everything related to it. Add to that the tug-of-war between environmental concerns, climate policy, and old-school fossil fuel demand, and it’s a complex puzzle.
Supply Chain Disruptions and Geopolitical Risks
- Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people around the world achieve their financial goals through our investing services and financial advice.
- Analysts expect select renewable energy and infrastructure-focused companies to benefit from global energy transition trends, potentially boosting demand and earnings through 2025.
- With over $70 billion in assets under management (AUM), it's the second-largest ETF focused specifically on dividend stocks.
- It currently holds just over 100 energy stocks in a market cap-weighted portfolio.
Investing in oil, whether through an energy or oil ETF, comes with advantages and disadvantages. If you are a believer in active management and have faith in the current portfolio management team at Ninepoint, NNRG is a great fund to consider. As an actively-managed fund designed to outperform broader energy indices, NNRG is a good option to consider as an actively managed Energy ETF once you have weighed its pros and cons. While the ETF is rated as high risk, the addition of a covered call strategy does help to reduce some of the downside volatility (from the constant return of call premiums).
Beste Olie ETF: Olie Trackers bij DEGIRO & Meer Happy Investors
Because the stocks it owns are nearly identical to those in XLE. RSPG does not weight the stocks according to their market capitalization. So it is the same thing, but with very different stock by stock weightings, which makes them perform very differently.
Schlumberger is the largest oilfield services company, with strengths in offshore projects and digital solutions. Chevron operates in upstream, midstream, and downstream energy markets worldwide. It focuses on disciplined spending and maintaining high shareholder returns. It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories. This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits. While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.
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A covered call strategy can be useful from an income perspective and perform well in specific market conditions. ENCC passively tracks the Solactive Equal Weight Canada Oil & Gas Index but is active from a covered call-writing perspective. Prior to February 26, 2020, the ETF was previously named the Horizons Canadian Midstream Oil & Gas Index ETF. HOG currently passively tracks the Solactive Pipelines & Energy Services Index.
Similar to hedge funds, NNRG charges a performance fee of 10% on any return above the S&P/TSX Capped Energy Total Return Index. When considering the management fee, performance fee, and trading fees, the total fees that you will pay as an investor will be extremely high relative to passive ETFs. If you are looking to invest in the Canadian oil and gas sector and are also looking for a high monthly income stream, ENCC is an excellent option to consider. The ETF offers investors a good yield and pays distributions on a quarterly basis.
- As I said, I have familiarity with each of these, having used them before.
- They'd gain exposure to 100 top dividend stocks with a very attractive combined dividend yield of 3.7% based on the fund's latest dividend payment.
- In our educational articles, a “top stock” is always defined by the largest market cap at the time of last update.
- However, our energy sector is heavily reliant on the United States.
- It focuses on disciplined spending and maintaining high shareholder returns.
Commodity prices like oil will rise and fall through different economic cycles, and with it, so will the Canadian energy sector. You’ll need to time your exit regarding these types of investments. But, if you catch the industry on an upcycle, money will be made. ZEO provides diversified exposure to Canadian energy stocks but gives equal weighting to holdings, reducing concentration risk from large-cap oil producers. It owns about 55 of them, and there is some overlap in holdings with XLE and RSPG.
Global Energy Market Outlook (2025–
ExxonMobil is a global oil & gas integrated company with operations in exploration, production, refining, chemicals, and low-carbon solutions. One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike. The higher expense ratio for RSPG may be a worthwhile trade-off for investors looking to sidestep concentration risk and gain more balanced exposure to the sector. We also excluded leveraged and inverse energy ETFs, which are generally geared toward short-term trading, not long-term investing. These products reset daily, and compounding effects over time can result in returns that deviate significantly from the underlying benchmark.
This ETF gives you that high-risk, high-reward exposure – but with a safety net through diversification.
Energy Select Sector SPDR ETF
Futures ETFs offer purer price exposure but face contango issues, whereas equity ETFs are influenced by broader market factors beyond oil prices. An oil & gas ETF is an exchange-traded fund that is designed to provide exposure to the oil and gas industry. These ETFs are specifically focused on tracking the performance of companies involved in the exploration, production, refining, marketing and distribution of oil and natural gas. Commodity-based ETFs like the United States Brent Oil Fund (BNO) let you capitalize on oil price movements, while equity-based ETFs like XLE benefit from the profitability of energy companies. Their liquidity means you can trade them easily during market hours, unlike futures contracts. Plus, they typically have lower expense ratios than actively managed funds, saving you money over time.
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As an investor, you want to be on the side of the winners, and AI is the winning ticket. You simply won’t find another AI and energy stock this cheap… with this much upside. Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Still, this ETF remains a favorite thanks to its rock-bottom fees, deep liquidity and an available options chain for more advanced strategies.
Best Crude Oil ETF Strategies for Effective Portfolio Diversification
XEG offered by Blackrock’s iShares also tracks Canadian energy companies involved in various stages of the energy delivery cycle. Between the beginning of 2020 and mid-2022, the Canadian energy sector (as well as HXE) has performed exceptionally well due to rising oil prices. Since these funds track oil prices, they increase in value when oil prices go up. There are various types of crude ETFs, but the most basic funds track oil prices through the use of commodities and options. Energy remains a core sector for long-term portfolios, offering diversification, income through dividends, and exposure to both traditional and renewable market growth. Global energy companies face evolving climate policies and stricter ESG investing in energy requirements.
These funds track the price of West Texas Intermediate, which is the benchmark price for US crude oil. Best oil etf Some funds hold a basket of oil companies, while others invest in commodity futures. The energy sector outlook 2025–2030 includes significant LNG and infrastructure growth. Energy infrastructure companies such as Oneok, Energy Transfer, Williams, and Enbridge are developing new LNG terminals, pipelines, and storage facilities to meet rising export demand. Enbridge is one of North America’s largest energy infrastructure companies, with oil, gas, and renewable operations.