iShares U.S. Oil & Gas Exploration & Production ETF
If you want to forgo the megacaps either because you own individual shares or want to tap into bigger growth potential, consider the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
Nearly 100% of this fund is in the exploration and production segment of the energy market, with top holdings that include Occidental Petroleum (OXY), Anadarko (APC) and EOG Resources (EOG) at the top of the list; that trio represents about 30% of total assets.
You won’t find a lot of dividend potential here, and the plays are much more volatile since they can more easily be exposed to market pressures such as a demand drop or a jump in oil prices. But when you’re bullish on energy, this could be a good thing. Take the 22% returns year-to-date as proof, as this energy ETF has handily outperformed the market despite some of the laggards in Big Oil.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing he did not own a position in any of the stocks named here.