Energy ETF Cheat Sheet: Expenses, Dividends & Returns2015-04-24
Allocations to energy stocks are a key component of many investing strategies, and this sector is well represented in the portfolios of both buy-and-hold investors and more active tactical traders.
For those seeking to overweight energy stocks, there are a number of ETFs that offer exposure to this sector. The Energy Equities ETFdb Category consists of nearly 30 exchange-traded products, including domestic and international funds, as well as products targeting narrow segments of this market such as exploration and production, natural gas, and coal.
Cheapest Energy Equity ETFs
There is a wide range of expenses in this ETFdb Category; some funds charge as little as 18 basis points while others have expense ratios over 0.80% annually.
Most Heavily Traded Energy Equity ETF
On an average day, the ETFs in the Energy Equity ETFdb Category trade tens of millions shares. The most heavily traded ETF in this category (4/14/2015) is the Energy Select Sector SPDR (XLE ), which has an average daily volume of more than 22 million shares.
Below are the top five most heavily-traded energy ETFs (as of 4/14/2015):
|Energy Select Sector SPDR (XLE )||22,369,746|
|SPDR S&P Oil & Gas Explor & Product (XOP )||11,375,775|
|Market Vectors Oil Services ETF (OIH )||7,363,029|
|iShares U.S. Energy ETF (IYE )||1,358,355|
|ISE-Revere Natural Gas Index Fund (FCG )||932,265|
Best Performing Energy Equity ETFs
The performance of energy equity ETFs is all over the board, especially given the volatile nature of the industry. As of April 14, 2015, the best performing Energy Equity ETFs are as follows:
|1 Year||China Energy ETF (CHIE )||5.59%|
|3 Years||Dynamic Energy E&P (PXE )||32.88%|
|5 Years||Dynamic Energy E&P (PXE )||77.11%|
Most Balanced Energy Equity ETFs
When comparing potential ETF investments, it is important to evaluate how deep and balanced the underlying portfolios are. Depth refers to how many individual securities comprise an ETF, while balance refers to how “top heavy” a product is–what percentage of assets are concentrated in the ten largest individual positions.
- Deepest Energy Equity ETF: The MSCI Global Energy Producers Fund (FILL ) has approximately 230 individual holdings. The Market Vectors Oil Services ETF (OIH ), and ISE-Revere Natural Gas Index Fund (FCG ) are the “shallowest” ETFs, with 26 and 29 holdings respectively.
The Bottom Line
The ETF world democratized the energy industry, allowing investors to access various corners of this highly popular segment. As always, be sure to look under the hood and ensure that you understand a fund prior to making an investment.
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Disclosure: No positions at time of writing.