Energy ETF for One-Stop Shoppers
NEW YORK (TheStreet) -- ETF investors have an opportunity to play the various segments of the world's energy portfolio using a diverse collection of funds, but for investors who don't have the time to research the industries involved, there's the choice of active management.
The oil industry has recently fallen out of favor in the eyes of many consumers and lawmakers as BP (BP) continues to struggle to halt the flow of oil spewing into the Gulf of Mexico from the site of the Deepwater Horizon explosion.
While sentiment towards BP and those responsible for the spill is negative, from an investing standpoint, ignoring the broad energy sector is a poor choice. As nations around the world continue on the road to development, populations grow, and technology becomes a larger part of all of our everyday lives, the need to find ways to power our homes, cars and various widgets will become increasingly more essential.
ETF investors have an opportunity to play the various segments of the world's energy portfolio using a diverse collection of funds. Coal bulls can track firms like Massey (MEE), Peabody (BTU) and China Shenhua Energy using the Market Vectors Coal ETF (KOL).Investors looking for exposure to the oil services industry can play the iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) or the SPDR S&P Oil & Gas Equipment & Services ETF (XES). Those who think natural gas is the next big thing can look into the First Trust Revere-ISE Natural Gas Index ETF (FCG). Finally, alternative energy options can be tracked using a slew of products including but not limited to Claymore/MAC Global Solar Energy Index ETF (TAN), PowerShares WilderHill Clean Energy Portfolio (PBW), and Market Vectors Nuclear Energy ETF (NLR). By applying different weightings to these funds, investors can design a portfolio that reflects their views of the world's current and future energy picture. While having the opportunity to personalize your energy exposure may be attractive to some investors, the amount of research and time needed to achieve this task may prove to be too daunting for others. Thankfully, there exists an actively managed mutual fund which provides passive investors with a one-stop-shop approach to the broad energy spectrum. As manager of the Fidelity Select Energy Fund (FSENX), John Dowd (the brains behind the fund since 2006) parses through all of the information and options that exist within the energy industry to create a portfolio that reflects the best of the various sectors.
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