) -- Explosive growth in emerging markets, as well as a trend toward efficient energy technology and "green" energy use, makes the energy sector a compelling area to allocate assets both in the short and long terms.

Equity-based energy ETFs offer exposure to everything from large, integrated firms like

Exxon Mobil

(XOM) - Get Report

to clean energy pioneers like


(CREE) - Get Report

TheStreet Recommends

, while avoiding the

regulatory hassles of funds

that use futures and swaps to access the sector.

These five energy ETF picks are well constructed, liquid funds that are worth considering when building a well-diversified portfolio.

  • iShares S&P North American Natural Resources Sector Index Fund (IGE) - Get Report. IGE tracks U.S-traded, natural resource-related, firms in both the energy and materials sectors.While much of this portfolio is focused on large energy firms like XOM, Chevron (CVX) - Get Report and ConocoPhillips (COP) - Get Report, IGE's underlying basket also includes miners like Barrick Gold (ABX) and construction materials producer Vulcan (VMC) - Get Report. This highly-traded, reasonably priced ETF is a good addition for investors looking to gain exposure to U.S.-traded energy firms, while avoiding overconcentration in the oil/gas subsector.
  • First Trust ISE-Revere Natural Gas (FCG) - Get Report While the success of the companies that comprise FCG is certainly tied to cyclical natural gas prices , the demand for the extraction and production of this energy source make this ETF a promising play over time. Top components like Pioneer Natural Resources (PXD) - Get Report and XTO Energy (XTO) , which have helped to propel FCG in 2009, still look like solid plays in 2010. FCG is certainly focused, but this fund's low concentration of assets in its top holdings helps to minimize security-specific risk.
  • PowerShares WilderHill Clean Energy (PBW) - Get Report. Scientists may disagree on global warming, but investors can be relatively certain that both legislation and regulation will favor "green energy" companies in the future.Investors looking to get ahead of the curve should consider PBW, a fund that includes firms like LED-provider CREE and solar power companies across the globe. PBW's well-balanced portfolio and reasonable expense ratio help to make green energy firms accessible to traders.
  • PowerShares Dynamic Oil & Gas Services (PXJ) - Get Report. Investors looking to gain exposure to oil and gas through ETFs have a wide variety of choices, but PXJ's indexing strategy sets this fund apart. Rather than just focusing on the largest gas and oil firms, PXJ's portfolio is selected using factors like fundamental growth, stock valuation, investment timeliness and risk factors. While PXJ's components include industry giants like Halliburton (HAL) - Get Report and Schlumberger (SLB) - Get Report, no single company makes up more than 5.21% of the underlying portfolio. PXJ's diverse large-, mid- and small-cap components help this fund to stand out among its peers.
  • iShares S&P Global Energy (IXC) - Get Report. Despite the top-heavy nature of its underlying portfolio, IXC offers inexpensive exposure to a wide range of global energy firms. This large, liquid, ETF tracks the S&P Global Energy Sector Index. Prospective investors should be aware that top component XOM makes up more than 14% of this fund's assets. Other top components in IXC include Royal Dutch (RDSA) and Petroleo Brasileiro (PBR) - Get Report. This fund is a good place to start for investors seeking broad exposure to the global energy market.

-- Written by Don Dion in Williamstown, Mass.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.