Vanguard Energy ETF
Asset manager Vanguard is the company that invented the index fund. Its focus is on passing savings down to regular retail investors, so its no wonder Vanguard’s ETF line-up features some of the lowest expense ratios on the planet. The Vanguard Energy ETF (NYSE:VDE), for one, clocks in at a rock-bottom 0.14%.
For that little bit in costs, investors actually get quite a lot.
The fund tracks the performance of the MSCI U.S. Investable Market Energy 25/50 Index — an index of large, medium, and small U.S. companies in the energy sector. On the whole, VDE provides exposure to 169 different energy firms, from integrated giants and independent exploration firms to midstream providers and even coal miners. (Of course, coal producers make up only 1.1% of the fund’s assets.)
Top holdings include integrated energy superpower Exxon Mobil (NYSE:XOM) at around 21% of assets, while Chevron (NYSE:CVX) and oil service giant Schlumberger (NYSE:SLB) round out the top three. More importantly, the fund’s broad exposure and low expense ratio has helped it return an annual 11% since its inception in 2004.
Overall, VDE could be the best “buy & hold” choice for those investors wanting to play rising global energy demand.