Finances & Money

How to Build Your Retirement Nest Egg with These Top Energy ETFs

As oil prices soar, there’s no better time to buy into the energy sector. Consider adding these energy ETFs to your retirement portfolio.

Almost 50% of Americans are afraid of retirement. The fear of running out of money is the number one concern Americans are facing.

While Social Security does help, it isn’t enough to enjoy the lifestyle you want. You want to be able to enjoy your retirement, play golf, relax, and not worry about finances.

One of the best ways to overcome retirement fears is to have a strong financial plan. The more money you can invest, diversify and save, the more secure you’ll feel.

You can make your financial future exciting today by investing in energy ETFs. We’ll show you how you can build your nest egg wisely with minimum risk. Here’s a brief overview of what ETFs you should consider investing with.

build your retirement nest egg with these top energy etfs

 

What Are Energy ETFs?

First, you’ll want a clear understanding of what an energy ETF can do for you.

ETF stands for “exchange-traded fund” and they deal with gas, natural oil, renewable energy and other types of energy products. There are different kinds of energy ETF’s.

You can choose to use one that has an entire sector index like manufacturers of energy equipment. Or you could choose a sub-sector like coal. It’s a great idea to diversify your investment over different sectors.

The best part about Energy ETFs is their ability to help aggressive and reserved investors. All types of investors from all over the can take part in these investments.

You’ll have a variety of choices such as renewable energy, oil and more to invest with. Make sure you take your time to research each ETF thoroughly before investing.

The companies you’ll be investing in will have a high level of training and experience. Every ETF index we’ll recommend below already has a proven method for meeting production and distribution goals.

1. Energy Select Sector SPDR

The SPDR ETF fund has almost $13.5 billion for them to invest and manage. For the past three months, the average volume of trades has been able to exceed 12 million.

The companies with the top 10 holdings for this ETF include:

  • Exxon Mobil Corp
  • Chevron Corporation
  • ConocoPhillips
  • EOG Resources Inc
  • Occidental Petroleum Corp
  • Schlumberger NV
  • Valero Energy Corp
  • Phillips 66
  • Marathon Petroleum Corporation
  • Halliburton Co

The goal of the SPDR investment is to be able to return prices that agree with the Energy Select Sector Index. To do this, the fund has a special replication strategy. A wide variety of different securities make up the SPDR index.

Oil, gas, energy services, energy equipment, and certain fuel types all contribute to the securities of the company. The SPDR energy ETF doesn’t diversify. Instead, SPDR will invest around 95% of its assets into the securities that make up the index.

2. Vanguard Energy

Next, we have a money-saving investment opportunity. Vanguard energy is one of the biggest and least expensive energy ETFs. The Vanguard fund has a more moderate managing system in place than the SPDR does.

Vanguard passively manages and advises the allocation of funds. Over their entire lifetime, Vanguard has been able to maintain a high annual performance. The average annual performance for Vanguard rests right around 8.99%.

That means, Vanguard has a performance rate that exceeds its competition. The closest competitor is Spliced US IMI energy; they have an annual performance average of 8.87%.

3. iShares Global Clean Energy

Do you want less exposure to oil and gas companies? The iShares Global Clean Energy ETF is a renewable energy ETF. The iShares index is a part of a number of different fund series. This series partners with the Global Clean Energy ETF.

The iShares series fund works great for investors who are looking to limit the investments they make in gas and oil. Instead, you’ll be working with companies who are creating renewable energy.

The iShares fund handles over $82 million in assets and they only have 30 stocks. With only 30 stocks, the fund’s assets remain in one concentrated area. The expense ratio has been 0.47% even though they had a slight drop in 2011 and 2012.

4. Market Vectors Oil Services

The Market Vector Oil Services ETF is very popular in the marketplace. The Market Vector ETF is hands down the most highly traded energy ETFs available in the market today.

Oil price investing is one of the most lucrative sectors to be a part of. The daily trading volume rests right between 8.8 and 8.9 million trades!

Market Vectors Oil Services sets their sights on the largest U.S. companies that service oil. Some of the U.S. oil service companies they target include:

  • Oil drilling
  • Oilfield services
  • Oil refining

The Market Vectors Oil Services ETF fund first began in 2011. Since Van Eck first introduced this fund, they’ve been doing very well.

Two of their largest holding companies are Schlumberger and Halliburton. These two holding companies count for approximately one-third of their portfolio.

5. John Hancock Multi-Factor

Finally, we have the John Hancock Muli-Factor Energy ETF or JHME. This ETF is a smart way to diversify your investments. They choose the JHME stocks using a variety of different factors.

Profitability and potential value guide the stock choices for this fund. This fund is smaller than the other ones and only has about $30 million. With only $30 million assets under management, this fund does a great job at diversifying their stock options.

Live the Life You Want

Now you are ready to build your retirement portfolio with energy ETFs.

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James

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