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Oil and gas exchange-traded funds (ETFs) offer investors more direct and easier access to the often volatile energy market than many other alternatives. While there is the potential for significant returns by investing in the oil and gas sector, the risks can be high. Oil futures, for example, tend to be volatile and often require a significant initial investment, which excludes many investors. By contrast, oil and gas ETFs offer access to a basket of energy equities. Also, some of these ETFs may track futures contracts or pursue other energy strategies. There are currently about 28 different oil and gas ETFs, excluding leveraged and inverse funds.
The best oil and gas ETF for Q1 2020 by one-year performance is the First Trust North American Energy Infrastructure Fund (EMLP). Below, we’ll look at the top 3 oil and gas ETFs as of February 13, 2020.
- Performance over 1 year: 15.1%
- Expense Ratio: 0.95%
- Annual Dividend Yield: 3.65%
- 3-Month Average Daily Volume: 724,862
- Assets Under Management: $2.9 billion
- Inception Date: June 20, 2012
- Issuing Company: First Trust
The First Trust North American Energy Infrastructure Fund is an actively managed ETF invests in energy master limited partnerships (MLPs) and similar companies that focus on North American infrastructure such as pipelines. The top holdings are currently TC Energy Corp. (TRP), a Canadian pipelines and energy company; Enterprise Products Partners LP (EPD), a midstream natural gas and crude oil pipeline firm; and Kinder Morgan, Inc. (KMI), an oil and gas pipeline and terminal company.
- Performance over 1 year: 1.2%
- Expense Ratio: 0.75%
- Annual Dividend Yield: 7.2%
- 3-Month Average Daily Volume: 2,708
- Assets Under Management: $11.2 million
- Inception Date: December 13, 2017
- Issuing Company: SL Advisors
Following the American Energy Independence Index, USAI holds a collection of multi-cap, U.S. and Canadian midstream energy companies. The fund’s top holdings include Enbridge, Inc. (ENB), a Canadian energy transport and distribution company; TC Energy Corp.; and Kinder Morgan, Inc.
- Performance over 1 year: -0.6%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 6.35%
- 3-Month Average Daily Volume: 862,016
- Assets Under Management: $781.8 million
- Inception Date: August 6, 2013
- Issuing Company: Global X
MLPX follows the Solactive MLP & Energy Infrastructure Index, holding a basket of multi-cap energy MLPs. The top fund’s holdings are the same as USAI: Enbridge, Inc., TC Energy Corp., and Kinder Morgan, Inc.
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