Founded in 1976, Bankrate has a long history of helping people make smart financial decisions. We have maintained this reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in the actions to take next. Exchange-traded energy funds are similar to other ETFs: they invest in securities based on a specific index, sector, commodity, or other asset category. Therefore, an energy ETF focuses on energy-related securities, such as oil, gas, or clean energy companies.
Two of the most popular energy funds are the First Trust NASDAQ Clean Edge Green Energy Index Fund and the iShares Global Clean Energy ETF. The VanEck Oil Services ETF is based on the MVIS (US, USA) index and its shares are intended to approach the evolution of prices and yields of the MVIS index. The shares of the energy ETF include some of the largest and most liquid companies that originate in the U. S.
and foreign countries, as long as they appear in the MVIS index, such as Schlumberger Ltd. The Fidelity MSCI Energy Index ETF invests at least 80% of its assets in securities included in the MSCI USA IMI Energy Index. The fund remains representative of the MSCI Index by choosing stocks that have investment characteristics, fundamental characteristics and liquidity measures similar to those of the index. Some of its major interests include Exxon Mobil Corp. While some ETFs allow diversification that can help minimize risk, others are based on specific sectors, which can actually increase risk. As with all investments, it's crucial that you do your research before choosing an energy ETF to invest in.
A good way to start is to decide if you want to focus on traditional energy ETFs or clean energy ETFs, depending on your investment objectives and personal preferences. Then, you can open a brokerage account to start investing. Our in-house research team and on-site financial experts work together to create accurate, unbiased and up-to-date content. We verify every statistic, quote and fact using reliable primary resources to ensure that the information we provide is correct. You can learn more about GOBankingRates processes and standards in our editorial policy. BlackRock defines sustainable investments as investments in issuers or securities that contribute to an environmental or social objective, do not significantly harm any of those objectives and in which the participating companies follow good governance practices.
BlackRock has developed its own methodology for determining sustainable investments and the Fund uses other methodologies to measure the achievement of the sustainable investment objective. Investing in emerging markets also involves an increase in other risks, such as increased volatility and the possibility of lower trading volume. An ETF can facilitate investment in the oil sector, but due to the volatile nature of oil prices and the dynamics of the industry, you'll still need to know what you want to invest in. If you're going to invest in the energy sector, which has historically mainly included oil and gas companies, buying an energy exchange-traded fund (ETF) is an easy way to do so. Portfolio managers are subject to pre-negotiation and post-negotiation controls within the investment platform when funds promote environmental or social characteristics, integrate sustainability into the investment process in a binding manner or have a sustainable investment objective. Investments are examined according to these criteria through system-based controls, and those that are considered to cause significant harm are not considered sustainable investments. Despite reasonable efforts, the information may not always be available, in which case a subjective evaluation will be made based on BlackRock's knowledge of the investment or sector.
The investment information provided here is for general informational and educational purposes only and should not be interpreted as financial or investment advice. Any estimate based on past performance does not guarantee future performance and before making any investment you should analyze your specific investment needs or seek advice from a qualified professional.