Energy

Why invest in Energy

Energy is needed in every facet of our lives , be it for producing goods, lighting our homes, keeping us warm, driving around and much more. Our modern life depends on energy sector. The demand for energy is ever growing. Energy sector can have companies that have value plays like the integrated oil and gas that provide both dividend and value or steady income opportunities offered by master limited partnerships and pipeline operators  . On the other hand  some companies offer growth like oil and gas explorers albeit with additional risks

Companies that are engaged in exploration, production, and or management of energy resources like oil , coal and gas make the Energy sector.  GICS classification of the Energy Sector comprises companies engaged in exploration & production, refining & marketing, and storage & transportation of oil & gas and coal & consumable fuels. It also includes companies that offer oil & gas equipment and services.

Key factors to consider before investing

Top 5 ETF’s by Market Capitalization

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
 Energy Select Sector SPDR  XLE  12/6/1998  0.14%
 Alerian MLP ETF AMLP  08/25/2008 0.85%
 Vanguard Energy Index  VDE  09/23/2004  0.10%
 UBS ETRACS Alerian MLP Infrastructre ETN  MLPI  04/01/2010  0.85%
 SPDR S&P Oil & Gas Exploration & Production XOP  06/19/2006  0.35%

 

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