Investors, who look forward to investing in the oil ETFs, or for that matter in some other energy ETFs, frequently gravitate more in the direction of the Energy Select Sector SPDR (XLE). That is not that surprising, as with more than $8 billion in total assets, the Energy Select Sector SPDR definitely appears as one of the top most oil ETFs on the market.
For investors who opt to invest their funds in the energy companies that are listed on the S&P 500 index, the Energy Select Sector SPDR offers an exposure to a wide range of companies in the oil sector, with a very modest expense ratio of 0.21%. ETF market has consistently grown over time. Currently, there are many oil ETFs available that serve to achieve a number of desired investment objectives.
Oil Exploration & Production ETFs
Main ETFs in this group comprise of PowerShares Dynamic Energy Exploration & Production (PXE), iShares Dow Jones US Oil & Gas Exploration & Production ETF (IEO), and SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which in turn invest their funds in the stocks of other major companies such as Occidental Petroleum (OXY), EOG Resources (EOG), and Apache (APA), that are engaged in the production oil & gas.
Oil Services ETFs
Main ETFs in this group comprise of PowerShares Dynamic Oil & Gas Services (PXJ), Oil Services HOLDRs (OIH), iShares Dow Jones US Oil Equipment ETF (IEZ), and SPDR S&P Oil & Gas Equipment & Services (XES), which in turn invest their funds in the stocks of other major companies such as National Oilwell Varco (NOV), Halliburton (HAL), and Schlumberger (SLB), that mainly provide a range of services and drilling equipment to various oil companies.
Natural Gas ETFs
The main ETF in this group comprises of the First Trust ISE-Revere Natural Gas ETF (FCG) which invests its funds in the stocks of other major companies such as Southwestern Energy (SWN), Devon Energy (DVN), and Chesapeake Energy (CHK) that are chiefly engaged in the production natural gas.
Diversified Oil ETFs
Main ETFs in this group comprise of iShares S&P Global Energy ETF (IXC), Vanguard Energy ETF (VDE), and Energy Select SPDR ETF, which invest its funds in a wide range of energy firms that mainly includes integrated companies such as ExxonMobil (XOM), ConocoPhillips (COP), and Chevron (CVX), and some oil refiners, producers, as well as companies involved in oil services. While iShares S&P Global Energy ETF invests its funds in various energy related companies throughout the world, Vanguard Energy ETF and Energy Select SPDR ETF mainly invest their funds in the stocks of US-based companies.
Oil Income ETFs
Main ETFs in this group comprise of ALPS Alerian MLP ETF (AMLP) and JPMorgan Alerian MLP ETN (AMJ), which mainly invest their funds in energy companies that are structured as master limited partnerships. Magellan Midstream Partners (MMP), Kinder Morgan Energy Partners (KMP) and Enterprise Products Partners (EPD), are the main examples of these companies, which pay a major portion of their respective gains as dividends. This makes oil ETs most favored for many income investors.
