7 Best Canadian Oil ETFs to buy in July 2025

HXE is a passive ETF that tracks the S&P/TSX Capped Energy Index (Total Return). This is a market cap-weighted index, meaning that larger companies hold larger positions in the index (and, therefore the ETF). This is why investing in oil through an ETF can be a much less risky approach than buying oil futures outright. So producers that own large deposits or have a good track record of finding new resources are likely to keep making money.

• Similar to most leveraged ETFs, the ProShares Ultra Bloomberg Crude Oil accurately tracks the benchmark only for a day.
• Because of that, this ETF can be a great tool for investors to use to find top-notch dividend stocks to add to their income portfolio.
• Instead of betting on oil producers, an easier way to make money from oil is simply owning the land that contains oil.
• For example, you may buy an energy ETF to help offset the effect of rising oil prices on your other investments.
• And while green-minded activists tried to “take over” the company in 2021, it seems that so far, these efforts have brought little results.

Best Commodities Stocks & ETFs

This ETF gives you that high-risk, high-reward exposure – but with a safety net through diversification. Now let’s dig into why oil ETFs are a solid choice – and which ones might suit your investing style. Profit and prosper with the best of Kiplinger’s advice on investing, taxes, retirement, personal finance and much more. While the benchmark differs from that of VDE or XLE, the overall exposure and historical performance are very similar.

ProShares UltraShort Bloomberg Crude Oil (SCO)

They do not invest in physical commodities and should not be expected to directly track the price performance of oil and gas commodities. HOG tracks the Solactive Pipelines & Energy Services Index, which holds Canadian midstream oil and gas companies, mostly pipelines and energy services companies. Compared to broad energy sector ETFs, HOG has historically lower volatility given that its holdings have fixed service costs. As of February 2025, the ETF costs a MER of 0.74% and pays out distributions on a quarterly basis. Almost half of XLE’s assets are invested in three companies, Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), and Schlumberger Ltd. (SLB). The first two of these are oil and gas exploration and production companies, while the third is an oilfield services company.

VDE’s options chain isn’t as robust as XLE’s, with fewer available strike prices, expiry dates and contract open interest. So don’t expect to see any solar, wind or nuclear-focused ETFs on the list. That’s led to record levels of free cash flow – essentially the money left over after paying for operations and maintenance. Energy producers who sell those inputs can benefit from higher prices and pricing power, making them a rare winner when everything else is getting squeezed.

• But futures trading can be complicated and risky for inexperienced investors, making an oil ETF a more accessible way to gain direct exposure to oil prices.
• This roundup is specifically geared toward conventional energy ETFs that provide diversified access to the oil and gas industry in all its stages.
• US oil production was once considered to be in a terminal decline starting in the 1980s.
• So if you want a slice of the action without the hassle of picking individual companies, oil ETFs might be your ticket.

Risks and Potential of Investing in Oil ETFs

This roundup is specifically geared toward conventional energy ETFs that provide diversified access to the oil and gas industry in all its stages. Investing in oil is typically reserved for advanced commodity traders — if you’re trying to invest in the commodity itself. But if you’re just looking to gain exposure to oil, and to perhaps try to profit from its big swings, oil exchange-traded funds may be a better approach. The investing information provided on this page is for educational purposes only.

Best Fidelity ETFs to Watch in 2025

The ETF tracks the Dow Jones U.S. Dividend 100 Index, which aims to measure the performance of high-yielding dividend stocks with records of consistently paying dividends. It also selects companies based on the strength of their financial profiles compared to their peers. These funds track a commodity-related equity index, consisting of a Best oil etf basket of oil and gas-related stocks.

It owns assets both upstream (oil & gas production) and downstream (refineries). If the oil ETFs hold oil futures contracts, no dividend yields are offered. However, if the oil ETFs are equity-based i.e. investment in stocks of firms related to the energy sector, then dividends are available. But futures trading can be complicated and risky for inexperienced investors, making an oil ETF a more accessible way to gain direct exposure to oil prices. The best crude oil ETFs are Energy Select SPDR Fund, Vanguard Energy ETF, Alerian MLP ETF, SPDR S&P Oil & Gas Exploration & Production ETF, and United States Oil Fund LP.

The Invesco DB Oil Fund also trades WTI futures, but it’s designed to track a different benchmark index. Statistics or past performance is not a guarantee of the future performance of the particular product you are considering. 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. Check out oil ETF movers we’re watching so that you can get in on the action at the right time. The need for oil is projected to grow in accordance with the world’s population and the development of 3rd world nations.

The increase in oil prices usually sees people travel less, which negatively affects the airline sector. They don’t hold any crude futures or options, so oil prices don’t directly affect share prices. Oil services ETFs hold stocks from these companies, so they tend to perform well when the oil sector is riding high. Some funds hold a basket of oil companies, while others invest in commodity futures.

If you’re looking for other types of energy exposure, such as innovative green companies, you can find that, too. Some ETFs are focused on owning clean energy companies, including those in solar or wind energy. So you have many options when it comes to investing in energy ETFs.

Below are 10 of the top oil ETFs you can invest in right now, whether you’re looking for broad exposure, price tracking, or juicy dividends. This can erode returns in ETFs that roll over near-month futures contracts, as they are forced to repeatedly buy higher-priced contracts. Knowing the composition is crucial for understanding the ETF’s price behavior. Below, we’ll examine a selection of popular and well-regarded Oil ETFs, highlighting their key characteristics to help you make informed investment decisions. We will consider factors such as expense ratios, top holdings, and reasons to consider each ETF. Some of the fund’s largest holdings are in the ProPetro Holding Corporation, the Keane Group Inc. and RPC Inc.

This fund tracks the Solactive MLP infrastructure index, which includes master limited partnerships. Energy MLPs are generally focused on moving oil or gas from one place to another via pipeline. Due to their legal structure, MLPs typically pay out significant dividends.