Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 ETFs To Track Energy Sector Gains

By Investing.com (Tezcan Gecgil/Investing.com )ETFsJan 14, 2022 10:13
ng.investing.com/analysis/2-etfs-to-track-energy-sector-gains-101721
2 ETFs To Track Energy Sector Gains
By Investing.com (Tezcan Gecgil/Investing.com )   |  Jan 14, 2022 10:13
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Wall Street has been paying close attention to Brent and crude oil prices after the duo came under pressure in the last quarter of 2021, mainly due to the uncertainty caused by surging Omicron cases.

Yet, oil has started the new year on a solid note, providing tailwinds to many energy shares and exchange-traded funds (ETFs) focused on the sector.

Since the start of 2022, the Dow Jones US Oil & Gas Index is up about 12.3%. And in the past 12 months, the index returned over 45%.

Still, most analysts expect short-term volatility to continue in the sector.

According to the US Energy Information Administration (EIA), Brent crude spot prices should average $79 this quarter. But the EIA further points out:

“Global economic developments and numerous uncertainties surrounding the pandemic in the coming months could push oil prices higher or lower than our current price forecast.”

The natural gas forecast from the EIA could also be of interest to our readers. It highlights:

“Consumption of natural gas in the United States averaged 83.0 billion cubic feet per day (Bcf/d) in 2021, almost unchanged from 2020. We expect US natural gas consumption will remain at nearly the same level in both 2022 and 2023.”

We recently reviewed the energy sector as well as the Energy Select Sector SPDR Fund (NYSE:XLE). Today’s article introduces two other ETFs that could appeal to a range of investors who would like to keep the sector on their radar.

1. Alerian Energy Infrastructure ETF

  • Current Price: $20.45
  • 52-Week Range: $15.29 - $21.71
  • Dividend Yield: 7.19%
  • Expense Ratio: 0.35% per year

The Alerian Energy Infrastructure ETF (NYSE:ENFR) invests in North American midstream energy infrastructure companies. These names include companies and master limited partnerships (MLPs) that transport, store or process energy commodities. The fund started trading in October 2013.

ENFR Weekly Chart
ENFR Weekly Chart

ENFR, which has 33 holdings, tracks the returns of the Alerian Midstream Energy Select Index. The fund’s top 10 names account for over 61% of net assets of $73.3 million.

Regarding the sub-sectoral breakdown, the gathering and processing segment makes up the highest portion, with 33.62%. Then, we see Pipeline Transportation/Natural Gas (30.67%) and Pipeline Transportation/Petroleum (26.21%).

Among the leading names on the roster are Enbridge (NYSE:ENB), Enterprise Products Partners (NYSE:EPD), TC Energy (NYSE:TRP), Energy Transfer (NYSE:ET), The Williams Companies (NYSE:WMB), and Plains GP (NASDAQ:PAGP).

Since the start of 2022, ENFR has returned 8.3%. And in the past 12 months, the ETF is up 25.1%. Moreover, the fund hit a multi-year high of $21.71 in October.

Long-term shareholders are also entitled to dividends; the current price supports a 7.19% yield.

Readers interested in midstream energy names with typically robust and growing yields could consider buying the fund at the next pullback. A potential decline toward the $19 level would improve the margin of safety.

2. First Trust Natural Gas ETF

  • Current Price: $19.35
  • 52-Week Range: $9.68 - $19.87
  • Dividend Yield: 1.50%
  • Expense Ratio: 0.60% per year

Our second fund, the First Trust Natural Gas ETF (NYSE:FCG), gives exposure to explorers and producers of natural gas. The fund was launched in May 2008.

FCG Weekly Chart
FCG Weekly Chart

FCG, which has 43 holdings, tracks the returns of the ISE-Revere Natural GasTM Index. The leading ten stocks comprise close to 42% of net assets of $508.8 million.

Western Midstream Partners (NYSE:WES), ConocoPhillips (NYSE:COP), DCP Midstream (NYSE:DCP), Occidental Petroleum (NYSE:OXY), EOG Resources (NYSE:EOG), Pioneer Natural Resources (NYSE:PXD), and Devon Energy (NYSE:DVN) top the companies in the fund.

FCG returned over 15% and hit a multi-year high on Jan. 13. In the past 52 weeks, the ETF is up an eye-popping approximate 19.3%. P/B and P/S ratios stand at 1.95x and 1.67x.

Meanwhile, a busy earnings season is here. Therefore, short-term profit-taking could put pressure on a number of the holdings. We’d look to invest around the $18.7 level, or even below.

2 ETFs To Track Energy Sector Gains
 

Related Articles

2 ETFs To Track Energy Sector Gains

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Dahiru Yahya
Dahiru Yahya Jan 16, 2022 8:06
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hello
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email