- The energy sector has been the top-performing area of the U.S. market year to date, but it has 66 different ETFs spread across 13 subsectors. Which are the best to invest in?
- Here's a look at the six best-performing segments so far this year within the U.S. energy sector, along with the leading exchange traded funds in each space. All figures are per etfdb.com, and the rundown below excludes leveraged and inverse ETFs:
Sixth-Best Segment: Oil Equipment & Services
- This sector is +19.73% YTD on average.
- The segment has four ETFs to choose from, with the VanEck Vectors Oil Services ETF (NYSEARCA:OIH) enjoying the best performance year to date +38.96%.
- Longer term, OIH has had a +83.91% one-year performance, although its five-year return has been -64.39%.
- The ETF's top holdings are Schlumberger TD (19.28% of the portfolio), Halliburton (13.24%), Baker Hughes (6.77%), Transocean (5.27%) and ChampionX Corp. (5.15%).
Fifth-Best Segment: Energy Infrastructure
- The energy infrastructure segment is +38.99% YTD on average among its three ETFs offered.
- The subsector's best-performing ETF is the Alerian Energy Infrastructure ETF (NYSEARCA:ENFR), which is +42.13% YTD.
- From a one- and five-year perspective, ENFR is +51.63% and -7.79%.
- ENFR’s top five holdings are in Enbridge (10.43% of the ETF), Enterprise Production Partners (8.67%), TC Energy Corp. (7.30%), Energy Transfer (6%) and Kinder Morgan (5.48%).
Fourth-Best Segment: Master Limited Partnerships
- Master Limited Partnerships ("MLPs") are +42.74% YTD as a segment, with 16 ETFs available.
- The No. 1 ETF in this space is the InfraCap MLP ETF (NYSEARCA:AMZA), which is +62.71% YTD.
- From a one-year performance standpoint, AMZA is +81.21%, but on a five-year return, the ETF is -74.23%.
- AMZA’s top five holdings are MPLX LP Partnership Units (18.11% of the ETF), following by Enterprise Products Partner (13.18%), Western Midstream Partners (12.44%), Plains All American Pipeline (10.86%) and Nu Star Energy (10.28%).
Third-Best Segment: Oil & Gas Exploration and Production
- Oil & Gas Exploration and Production has a total of 16 exchange traded funds that have an average return of +46.08% YTD.
- The top performer in the segment is the Invesco Dynamic Energy Exploration & Production ETF (NYSEARCA:PXE), which is +77.80% YTD.
- PXE is also +100% on a one-year return, but -11.57% on a five-year return.
- Breaking down PXE’s holdings and investors will see the top five holdings as Continental Resources (5.73% of the portfolio), ConocoPhillips (4.88%), Pioneer Natural Resources (4.82%), EOG Resources (4.66%) and Hess (4.65%).
Second-Best Segment: Unconventional Oil & Natural Gas
- This energy segment has an average YTD return of +68.93%, although it only has one ETF.
- That's the VanEck Vectors Unconventional Oil & Gas ETF (NYSEARCA:FRAK), which is +68.93% YTD.
- Additionally, FRAK is +107.07% over a one-year period, but -24.70% on a five-year performance.
- FRAK’s top five holdings are ConocoPhillips (8.03%), EOG Resources(7.65%), Pioneer Natural Resources (6.67%), Hess (6.28%) and Occidental Petroleum (5.96%).
No. 1 Best Segment: Natural Gas
- This energy segment is represented by one exchange traded fund, First Trust Natural Gas ETF (NYSEARCA:FCG). That has a YTD return of +81.2%.
- Longer term, FCG has returned +123.63% over the past year, but has fallen 37.10% in the past five.
- FCG’s top five holdings are DCP Midstream (4.83%), Occidental Petroleum (4.78%), ConocoPhillips (4.33%), Devon Energy (4.28%) and Diamondback Energy (4.27%).
The Bottom Line
- Here's a look at how the top ETFs in each subsector have fared against each other on a YTD chart:
- Stay tuned for an upcoming article on the energy sector's worst-performing subsectors and ETFs. So far, two green-energy ETFs are among the worst performers YTD not only among energy exchange traded funds, but out of the entire 2,000+ ETF universe.