The Ultimate Guide To Screening Energy ETFs

by on June 11, 2012 | ETFs Mentioned:

For investors seeking to gain exposure to energy prices–whether natural gas, crude oil, or anything in between–exchange-traded products have become popular tools to use. The widespread availability, superior transparency, and relatively low costs have obvious appeal; ETFs (and ETNs) have made access to commodities much easier and cheaper.

The ETF universe includes products that target several different types of energy resources, including crude oil, natural gas, Brent crude, heating oil, and gasoline. And in many of these categories, there are multiple options form which to choose. Below, we highlight some useful tools for screening commodity ETFs as well as a few of the noteworthy products for accessing each type of energy commodity: 

 The Best Commodity ETF Screening Tools

1. ETFdb Screener (with Pro Excel Download): This flexible tool can be used to filter through ETFs in any asset class, including commodities. Users can identify ETFs targeting various energy commodities, and further narrow down the search based on expenses, applicable tax rates and forms, and commission free trading availability.

ETFdb Pro members can download screener results into an Excel spreadsheet or CSV file [sign up for a free 7-day trial to Pro].

2. Commodities Database at Commodity HQ: This database covers much more than just energy commodities, and can be a useful tool for basic information on various types of natural resources. The Commodity HQ database includes the vital stats for futures contracts on many energy contracts, and also highlights the available ways to gain exposure to a number of different energy commodities (such as stocks, ETFs, and futures).

3. Head-To-Head ETF Comparison Tool: This free tool is useful for comparing two ETFs side by side to see which makes the most sense for your investment objectives. The head-to-head comparison tool displays a number of different metrics, including basic information such as expenses and structure and detailed historical performance figures.

ETFdb Pro members can see what our team of analysts thinks about each product though access to the Analyst Takes for each ETF.

4. XTF: This site is home to a boatload of information on all types of ETFs, including those that offer exposure to energy commodities. XTF also maintains a proprietary ranking system that evaluates the structural integrity and investment rankings for each ETF, giving investors additional factors to consider when analyzing potential holdings.

5. AssetCorrelation.com: When considering exposure to natural resource prices, investors are often interested in determining the correlation to “traditional” asset classes. This is especially true with energy commodities, and especially true in the current environment. Generally speaking, investors considering commodities will be looking for securities that can bring diversification benefits to their portfolios.

This free tool allows investors to see how various energy ETFs correlate to one another as well as to broad-based funds such as SPY or AGG. Results can be shown for multiple ETFs and over various timeframes.

Useful Links For Every Energy Commodity

Below we provide some helpful links for each and every type of energy commodity.

WTI Crude Oil

Crude Oil ETFs
Number of ETFs 17
ER Range 0.45% – 1.54%
Issuers USCF, PowerShares, Teucrium, iPath, VelocityShares, UBS, RBS
ETF Structures Commodity Pool, ETN
Leveraged / Inverse -1x, -2x, -3x, 2x, 3x

West Texas Intermediate (WTI) Crude Oil is one of the most heavily traded commodity contracts in the world; this is the contract that is generally quoted in the financial presses when changes in oil prices are discussed.

There are more than a dozen ETFs linked to crude oil. Using the Excel download from the Crude Oil ETF page on ETFdb.com (available to all ETFdb Pro members with a free 7-day trial), we highlight some of the standouts [get a free sample Excel download]:

  • Commodity Overview: How to invest in WTI Crude Oil at Commodity HQ. WTI ETFs vs. WTI Futures vs. WTI Stocks vs. Physical WTI (n/a).
  • Cheapest Crude Oil ETF: The Unites States Oil Fund (USO) charges a management expense ratio of just 0.45%.
  • Most Heavily Traded Crude Oil ETF: USO has an average daily trading volume of more than 7,000,000 shares.
  • Commission Free Oil ETFs: The PowerShares DB Oil Fund (DBO) can be traded commission free on TD Ameritrade. The FactorShares 2x Oil Bull / S&P 500 Bear (FOL) can be traded commission free on Interactive Brokers.
  • Leveraged Crude Oil ETFs: Inverse and leveraged crude oil ETFs include SCO (-2x), SZO (-1x), DTO (-2x), UCO (2x), DNO (-1x), FOL (2x), UWTI (3x), and DWTI (-3x).
  • Research Reports: The USO Analyst Report and Realtime Ratings is available to ETFdb Pro members; see Realtime Ratings for all crude oil ETFs here.

Natural Gas

Natural Gas ETFs
Number of ETFs 10
ER Range 0.60% – 1.65%
Issuers US Commodity Funds, ProShares, Barclays iPath, UBS, Velocity Shares, Teucrium
ETF Structures Commodity Pool, ETN
Leveraged / Inverse -3x, -2x, 2x, 3x

Natural gas is a part of everyday life for just about millions of Americans, and the “market share” of this fuel has increased dramatically in recent years thanks to widespread availability and technological breakthroughs. Unfortunately, it’s been a terrible investment destination; natural gas prices have slumped quite a bit in recent years.

Nevertheless, natural gas ETFs remain popular, and there are a number of products available. Using the Excel download available from the natural gas types page, we highlight some noteworthy ETFs:

Heating Oil

Heating Oil ETFs
Number of ETFs 1
ER Range 0.60%
Issuers US Commodity Funds
ETF Structures Commodity Pool
Leveraged / Inverse (n/a)

Heating oil generally exhibits a strong correlation to energy commodities, but has unique price drivers as well. There is currently only one ETF offering exposure to this fuel, with a relatively moderate base of assets.

Brent Oil

Brent Oil ETFs
Number of ETFs 3
ER Range 0.75% – 1.35%
Issuers US Commodity Funds, Velocity Shares
ETF Structures Commodity Pool, ETN
Leveraged / Inverse -3x, 3x

Brent crude oil is generally similar to WTI, though there are several differences between these types of fuel [see Brent vs. WTI]. Though WTI has historically been the primary benchmark for crude oil, there are signs that Brent may be stepping to the forefront. In recent months the relationship between Brent and WTI has been volatile, which has created some unique trading opportunities.

There are a handful of ETPs that offer exposure Brent, including some 3x leveraged ETNs offered by VelocityShares:

RBOB Gasoline

RBOB Gasoline ETFs
Number of ETFs 1
ER Range 0.60%
Issuers US Commodity Funds
ETF Structures Commodity Pool
Leveraged / Inverse (n/a)

RBOB gasoline obviously exhibits a strong correlation to crude oil, but these two types of fuel do not always move in perfect unison.

RBOB gasoline is much less popular as an investment, but there is an ETF that delivers easy access to this commodity:

Broad Energy ETFs

Broad Energy ETFs
Number of ETFs 5
ER Range 0.65% – 0.75%
Issuers Invesco Power Shares, ELEMENTS, Barclays iPath, UBS,
ETF Structures Commodity Pool, ETN
Leveraged / Inverse (n/a)

For investors seeking exposure to multiple energy commodities, there are a number of products that blend the contracts highlighted above.

  • Commodity Overview: How to invest in Broad Energy at Commodity HQ.
  • Cheapest Broad Energy ETF: E-TRACS UBS Bloomberg CMCI Energy ETN (UBN) charges a management expense ratio of just 0.65%.
  • Most Heavily Traded Broad Energy ETF: DBE has an average daily trading volume of more than 90,000 shares.
  • Commission Free Broad Energy ETFs: (n/a)
  • Leveraged Broad Energy ETFs: (n/a)

Disclosure: No positions at time of writing.