Since their introduction in the early 1990s, the simple experiment of an “index fund that behaves like a stock” has completely revolutionized investing for both institutional and retail portfolios. Because, as InvestorPlace Editorial Assistant Alyssa Oursler pointed out recently, exchange traded funds are a great way to get a lot of stock or bond diversification for not a lot of dough.
More and more money managers and individual investors have thus been making the switch from mutual fund holdings to ETFs. In fact, in the U.S. alone, over $2 trillion of assets sit in ETFs and their exchange traded note (ETN) cousins. And if you add up all the funds across the U.S., Canada, Europe and Asia, there are more than 4,700 different ETFs available to choose from.
Of course, such a staggering number does make it difficult to pick just the right ETF — especially in certain sectors of the market. For example, my personal portfolio stomping ground — the energy sector — has nearly 27 different funds to choose from.
Heck, that number jumps to almost 80 if you include those tracking energy commodities, master limited partnerships and those companies involved in renewable energy.
Luckily, I’ve already sorted through the stack for you to find the very best options. Here are the top five energy ETFs to consider for your portfolio.