Screening Energy ETFs: An ETFdb.com Guide2015-04-24
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 to choose from.
Below, we highlight some useful tools for screening commodity ETFs as well as a few of the most noteworthy products for accessing each type of energy commodity:
The Best Commodity ETF Screening Tools
- ETFdb Screener: 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].
- 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).
- 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.
- 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.
- 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.
Below we provide some helpful links for each and every type of energy commodity.
WTI Crude Oil
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, we highlight some of the standouts:
- 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).
- Most Heavily Traded Crude Oil ETF: The United States Oil Fund (USO ) is by far the most heavily traded crude ETF.
- 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).
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:
- Commodity Overview: How to invest in Natural Gas at Commodity HQ. Natural Gas ETFs vs. Natural Gas Futures vs. Natural Gas Stocks vs. Physical Natural Gas (n/a).
- Most Heavily Traded Natural Gas ETF: The United States Natural Gas ETF (UNG ) is the most popular choice, trading millions of shares each day..
- Leveraged Natural Gas ETFs: Inverse and leveraged natural gas ETFs include (BOIL ) (2x), (KOLD ) (-2x), (UGAZ ) (3x), (DGAZ ) (-3x),
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.
- Commodity Overview: How to invest in Heating Oil at Commodity HQ. Heating Oil ETFs vs. Heating Oil Futures vs. Heating Oil Stocks vs. Physical Heating Oil (n/a).
- Heating Oil ETF: The United States Heating Oil Fund (UHN ) is the only ETF targeting this corner of the energy market.
- Research Reports: The UNH Analyst Report and Realtime Ratings is available to ETFdb Pro members.
Brent crude oil is generally similar to WTI, though there are several differences between these types of fuel.
Be sure to read 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.
- Commodity Overview: How to invest in Brent Oil at Commodity HQ. Brent Oil ETFs vs. Brent Oil Futures vs. Brent Oil Stocks vs. Physical Brent Oil (n/a).
- Most Heavily Traded Brent Oil ETF: The United States Brent Oil Fund (BNO ) trades tens of thousands of shares each day.
- Research Reports: The BNO Analyst Report and Realtime Ratings is available to ETFdb Pro members.
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:
- Commodity Overview: How to invest in RBOB Gasoline at Commodity HQ. RBOB Gasoline ETFs vs. RBOB Gasoline Futures vs. RBOB Gasoline Stocks vs. Physical RBOB Gasoline (n/a).
- RBOB Gasoline ETF: United States Gasoline Fund (UGA ) trades tens of thousands of shares each day.
- Research Reports: The UGA Analyst Report and Realtime Ratings.
Broad Energy ETFs
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.
- Most Heavily Traded Broad Energy ETF: The DB Energy Fund (DBE ) is the most popular option for traders.
The Bottom Line
There are a number of ETF options in the energy world, each with their own set of price drivers. Be sure to look under the hood of a fund prior to investment to ensure you fully understand how it works.
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