Energy ETFs often have investments in stocks like XOM, VLO, PSX, MPC, SLB and KMI. I generally invest directly in energy company stocks, but I think an ETF is a good way to gain additional exposure to the energy sector. My energy stocks are: VLO, XOM, GLOP, PBT, SU, PSX, MPC and MTR. VLO is my largest energy investment because of the excellent dividend growth.

If you want to invest in energy using an ETF you have many to choose from. Some of the top contenders are as follows:

Ticker    Name                                                          No. of Holdings

FENY      Fidelity® MSCI Energy Index ETF                                133

IXC         iShares Global Energy ETF                                               79

VDE        Vanguard Energy Index Fund ETF Shares                 140        

XLE         Energy Select Sector SPDR® Fund                                31

Ticker    Expense       Yield     Assets                   Turnover

FENY      0.08%                    3.21%    408.89M               5.00%

IXC          0.47%                    3.50%    1.23B                     4.00%

VDE        0.10%                    3.35%    3.66B                     5.00%

XLE         0.13%                    3.54%    13.52B                   8.00%

The key is to think long term for the energy sector. It will tend to be volatile, perhaps more so than other sectors. It is also wise to be diversified and not buy a single energy company. That is why I have eight energy companies in my mix of stocks.

Here is one idea of the “best energy ETFs”: