Vanguard Energy ETF
Another cyclical play — this time with an eye toward inflationary pressures that might take hold in 2014 or beyond — is the Vanguard Energy ETF (VDE).
With top holdings in megacaps like Exxon Mobil (XOM) and Chevron (CVX), investors can be confident in the stability of this fund should the market run into trouble. They all pay decent dividends, too, and will provide a bit of income.
The energy sector provides some pop longer-term for folks betting on a recovery improving demand for fossil fuels, as well as those expecting high federal deficits and the chance of a weaker dollar in 2014 to boost inflation. Right now inflation is handily under control, but farther down the road it could be a problem and result in rising crude oil prices — and thus profits across the energy sector rising in kind.
Total assets of VDE top $2.6 billion and the expense ratio — like always in Vanguard’s family of funds — is very low. This energy ETF charges just 0.14% in expenses, or $14 per $10,000 invested.