7 of the Best Energy ETFs

Vital Dollar may receive compensation from companies, products, and services covered on our site. For more details, please read about how we make money.

The Best Energy ETFs

While 2022 hasn’t been good for the stock market as a whole, the energy section has been very strong. Oil prices are at an all-time high, partially due to the ban on Russian oil that was imposed earlier in the year.

One of the easiest and most convenient ways to invest in the energy sector is through an exchange-traded fund. With an ETF, and investor can own a share in a portfolio of stocks that are involved in the energy industry in some capacity.

Energy ETFs are generally not the best option for long-term buy-and-hold investors (see our list of the best ETFs for long-term growth). But with gas prices, and inflation in general, rising quickly, more investors have been turning to energy stocks and ETFs as a short-term solution.

In this article, we’ll look at some of the best energy ETFs available. If you want to analyze and evaluate stocks or ETFs, we highly recommend StockRover. With the help of StockRover, it’s easy to compare specific stocks or ETFs side-by-side. You can also create your own portfolios, run future simulations, and much more.

This article includes a chart from StockRover that shows the performance of each of these ETFs over the past five years.

Best Stock Screener
Stock Rover - Powerful Investment Research Stock Rover - Powerful Investment Research

Stock Rover provides the most powerful and comprehensive tools for investors. Use it to find the best investment opportunities and maximize your returns. Sign up today and try it for free.

  • Research more than 8,500 stocks
  • Details on 4,000 ETFs and 40,000 mutual funds
  • Portfolio management (syncs with your brokerage)
  • Detailed portfolio performance
  • Powerful charting and screening
  • Fully customizable

When you’re ready to buy an energy ETF, you can use an app like Public.com or Webull to place commission-free trades. You can even buy fractional shares if you don’t have enough money for a full share.

The purpose of this article is to highlight some ETFs that may be a good fit if you’re looking to invest in the energy sector. This is not investment advice and it’s possible to lose money with these ETFs. If you have questions about your own situation, be sure to seek personalized help from a financial professional.

What is an Energy ETF?

Energy ETFs invest in the stocks of oil and natural gas companies, and to a lesser extent, alternative energy companies. Most of the ETFs track a specific index. Some include only large-cap stocks while others may also include medium and small-cap companies. Some focus specifically on clean energy r renewable energy.

The value of energy stocks is greatly dependent on the price of oil and natural gas. When prices are going up, these stocks and ETFs generally do very well. Unlike a mutual fund, an ETF can be traded any time the market is open, just like an individual stock.

The Best Energy ETFs

Here are some of the top energy ETFs available. You can also use StockRover to find and analyze other ETFs that may interest you.

All of the stats for the funds in this article are from VettaFi and are accurate as of the day of publication, June 17th, 2022.

Related: How to Get Free Stocks

1. Energy Select Sector SPDR Fund (XLE)

XLE, one of the most popular ways to invest in energy, tracks the energy sector of the S&P 500, which means it features large-cap U.S. stocks. Top holdings include names like Exxon Mobil, Chevron, Marathon, Valero, Phillips 66, and others.

Investors will appreciate the very low expense ratio (0.10%) and solid dividend yield. However, it’s important to be aware that this is not the most diverse fund. The top two holdings (Exxon Mobil and Chevron) currently account for more than 40% of the portfolio.

XLE Details:

Price: $73.34
Expense Ratio: 0.10%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of XLE
Chart provided by StockRover
Top Pick
Get Free Stock from Public.com Get Free Stock from Public.com

Public.com offers fractional shares so anyone can start investing. You'll love the social aspect that makes it possible to connect with other investors. Get a free stock slice worth up to $300 when you open an account through our link.

  • Commission-free trades of stocks and ETFs
  • Buy and sell 27 different cryptocurrencies
  • Fractional shares
  • Easy to use and beginner-friendly
  • Connect with a supportive community of investors
  • "Themes" help you to find investments that interest you
Offer valid for U.S. residents 18+ and subject to account approval. This is not a recommendation. You can lose money with any investment. Open To The Public Investing is a member of FINRA & SIPC. Regulatory and firm fees apply. New customers receive free stock with value $3-300; 0.3% receive the max value. Cryptocurrency trading provided by Apex Crypto LLC (NMLS ID 1828849). Apex Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. See Public.com/disclosures/

2. Vanguard Energy ETF (VDE)

VDE is another excellent option for fee-conscious investors, as it offers the same 0.10% expense ratio as XLE. Also like XLE, VDE offers attractive dividends.

This fund tracks the MSCI US Investable Market Energy 25/50 Index, which includes large, medium, and small-cap U.S. companies within the energy sector. Exxon Mobil and Chevron are the two largest holdings of VDE, but they make up a slightly smaller percentage of the overall portfolio as compared to XLE.

VDE Details:

Price: $101.74
Expense Ratio: 0.10%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of VDE
Chart provided by StockRover

3. iShares U.S. Oil & Gas Exploration & Production ETF (IEO)

IEO tracks the Dow Jones U.S. Select Oil Exploration & Production Index. The expense ratio of this fund (0.42%) is significantly higher than XLE and VDE, but it does offer slightly better diversification with the top two holdings (ConocoPhillips and EOG Resources, Inc) currently accounting for about 27% of the portfolio.

IEO Details:

Price: $80.32
Expense Ratio: 0.42%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of IEO
Chart provided by StockRover

4. Invesco Dynamic Energy Exploration & Production ETF (PXE)

PXE tracks the Dynamic Energy Exploration & Production Intellidex Index and currently includes about 30 holdings, with none of the current holdings account for more than 5% of the portfolio.

The expense ratio is comparatively high at 0.63%. This fund was designed to outperform market-cap-weighted benchmarks, but some investors will prefer funds with lower expense ratios.

PXE Details:

Price: $27.67
Expense Ratio: 0.63%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of PXE
Chart provided by StockRover
Commission-Free Trades
Get Up to 12 Free Stocks from Webull! Get Up to 12 Free Stocks from Webull!

Webull is a free investing app that provides advanced reporting tools and allows you to make free trades of stocks, ETFs, and options. Right now Webull is offering up to 12 free stocks when you signup through our link (use the button below) and deposit any amount.

  • Commission-free trades of stocks, ETFs, options, and cryptocurrency
  • Buy fractional shares for any amount
  • Extended trading hours
  • Advanced reporting tools
  • IRAs now available
  • 24/7 customer service

5. Fidelity MSCI Energy Index (FENY)

With an impressively-low expense ratio (0.08%), FENY is an attractive option for those looking for a simple way to invest in energy. The dividend payout is also solid.

FENY tracks the MSCI USA IMI Energy 25/50 Index, which includes many of the world’s largest oil producers. The portfolio includes about 80 different companies, including some small-cap stocks. As a result, it provides better diversification than some other energy ETFs. However, Exxon Mobil and Chevron account for about 37% of the portfolio.

FENY Details:

Price: $19.67
Expense Ratio: 0.08%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of FENY
Chart provided by StockRover

6. Global X MLP & Energy Infrastructure ETF (MLPX)

MLPX tracks the Stuttgart Solactive MLP & Energy Infrastructure. It currently includes about 25-30 holdings, with no individual stock accounting for more than 10% of the portfolio of the fund.

With fewer than 30 holdings, MLPX is not the most diversified energy ETF, but it does offer an attractive dividend yield of more than 5%. The expense ratio (0.45%) is on the higher side, but not as high as some others on this list.

MLPX Details:

Price: $36.79
Expense Ratio: 0.45%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of MLPX
Chart provided by StockRover

7. United States 12 Month Oil Fund LP (USL)

USL is a unique fund because it invests in crude oil futures for the next 12 months. There are no stocks in the portfolio, just an investment in sweet light crude oil futures. It could potentially serve as an inflation hedge, but the value of this ETF is completely dependent on crude oil prices. The expense ratio is also quite high at 0.88%.

USL Details:

Price: $40.84
Expense Ratio: 0.88%
Annual Dividend Yield:
1 Year Return:
3 Year Return:
5 Year Return:

Chart of USL
Chart provided by StockRover

Final Thoughts on the Best Energy ETFs

Energy ETFs are not for everyone and they’re probably not the best option for buy-and-hold investors. But in some situations, they perform very well and may serve as an inflation hedge. With prices oil and natural gas prices soaring, 2022 has been a good year so far for energy stocks and ETFs. As a result, more investors have been looking toward the best energy ETFs, like the ones covered in this article.

Disclosure: Information presented on Vital Dollar and through related email marketing is intended for informational purposes only and is not meant to be taken as financial advice. Please see our Disclosure for further information.