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”: