The Invesco DB Commodity Index Tracking Fund offers exposure to a wide range of commodities across the energy, metals and agricultural sectors. The iShares S&P GSCI Commodity-Indexed Trust is a hybrid ETF, offering exposure to several industries. Still, it tilts heavily toward the energy sector, with a nearly 60% weighting, per GSG’s latest disclosure. Most metal ETFs only provide exposure to gold and silver, but abrdn’s Physical Precious Metals Basket Shares ETF—its full name—offers exposure to gold, silver, platinum and palladium bullion. That enables it to appeal to investors who want to diversify beyond only one metal. The underlying gold itself is held at the London branch of JPMorgan Chase Bank.
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Whether analyzing market movements, evaluating investment opportunities, or demystifying complex financial concepts, Sarah’s writing is characterized by clarity, accuracy, and actionable insights. Through her engaging content, Sarah strives to educate and guide investors on their journey towards financial success. Oil & Gas Exploration & Production ETF offers great exposure to the domestic oil market. Besides the tech sector, communication services (15% of the holdings) and consumer discretionary stocks have a meaningful representation (13%). For most of the past decade, the economy experienced low interest rates and minimal inflationary pressures.
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This ETF intends to represent the energy sector of the Standard & Poor’s 500 index. It includes companies involved in exploration and production such as ExxonMobil and Chevron, as well as companies with exposure to energy equipment and services. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Investing involves risk including the possible loss of principal. The following oil ETFs are commodities ETFs, meaning they track the price of oil through benchmarks such as the Brent Crude Oil or West Texas Intermediate benchmarks.
Top Oil ETFs by AUM
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Some sectors may perform well while others do poorly, and others may be somewhat resistant to volatility because of the steadier nature of their businesses. Oil ETFs work by investing in oil directly, using derivatives such as futures to track the value of oil, or by buying shares in businesses that are part of the oil industry. Oil ETFs give investors an easy way to invest in oil or businesses involved in the oil industry.
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- For every $10,000 invested, only $20 goes toward servicing the annual fee.
- For most of the past decade, the economy experienced low interest rates and minimal inflationary pressures.
- Instead of directly tracking the price of oil, this fund invests in businesses that provide various oil-drilling equipment and companies that offer services to oil production companies.
- The S&P GSCI Crude Oil index is up about 3% since Monday and is 2% above Friday’s close.
- Its energy holdings helped pull performance up last year, spearheading GSG’s 24% total return in 2022.
- Retail investors curious about investing in oil have a couple of options—they can invest in oil companies that benefit from high oil prices or, if they’d like more direct exposure, they can trade oil futures.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. This makes the SPDR S&P Oil & Gas Equipment & Services ETF a less risky option when compared to other oil ETFs on the market. The SPDR S&P Oil & Gas Equipment & Services ETF tracks the S&P Oil & Gas Equipment & Services Select Industry Index and currently has about $286 million in assets. The United States Oil Fund is an inexpensive ETF that tracks the price of West Texas Intermediate Light Sweet Crude Oil.
The vast majority are futures contracts to buy and sell crude oil from corporations based in the United States. Its energy holdings helped pull performance up last year, spearheading GSG’s 24% total return in 2022. That shows the importance of getting timing right when it comes to the volatile world of commodities in general and energy in particular. While it’s a more direct play on oil prices, it still won’t perfectly track WTI, and you won’t receive dividend income like you will with so many of the other energy ETFs on this list.
Rather than buying oil directly, you purchase shares in companies that profit by extracting and selling oil. With $2.6 billion invested in the fund as of February 2022, USO is relatively liquid. Its expense ratio, however, is the Best oil etf highest of the ETFs on this list at 0.83%, equivalent to $8.30 for every $1,000 invested. On top of that, oil has performed poorly over the past three years, leading the fund to lose almost a quarter of its value over that time.
These types of companies typically feature much higher yields than exploration-and-production, refinery and distribution companies – evident in AMLP’s juicy 7%-plus yield. Income-minded investors might prefer our next pick to many of the other still-generous dividend ETFs on this list. Right this second, then, neither Exxon or Chevron are top five holdings. The fund’s one-year https://investmentsanalysis.info/ returns are 74.52%, while the median return in the same asset class was 11.70% over the past year, as of Feb. 17, 2022. The fund’s one-year returns are 15.89%, while its benchmark index is up 16.51% over the past year, as of Feb. 17, 2022. The fund’s one-year returns are 63.83%, and it is up 74.27% over the past year against its benchmark, as of Feb. 17, 2022.
There are six distinct oil commodity ETFs that trade in the United States, excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). Oil and gas stocks can produce significant capital gains from share price appreciation and attractive dividend income. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. The increase was driven by greater production in the oil-rich Permian Basin. Exxon has established itself as the biggest player in the region after acquiring Pioneer Natural Resources last year. It merged the then-leader’s 850,000 net acres with Exxon’s 570,000 net acres. In descending order of weight, DBA currently holds futures in sugar, cocoa, live cattle, soybeans, coffee, corn, lean hogs, wheat, feeder cattle and cotton.
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