Valero Energy Corporation (VLO), Chesapeake Energy Corporation (CHK): This Gas and Oil ETF Can Pump Up Your Portfolio

Page 1 of 2

Valero Energy Corporation (NYSE:VLO)Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some gas and oil stocks to your portfolio, the iShares Dow Jones U.S. Oil and Gas Exploration Index ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this gas and oil ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The gas and oil ETF’s expense ratio — its annual fee — is a relatively low 0.47%. The fund is on the small side, too, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in to this gas and oil ETF.

This gas and oil ETF requires faith in the future, as its past has been disappointing, underperforming the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why gas and oil?
Gas and oil companies as well as gas and oil ETFs are worth considering because despite growing interest in alternative energy, we’re still quite dependent on good old fossil fuels.

More than a handful of energy companies had strong performances over the past year. Valero Energy Corporation (NYSE:VLO) soared 94%, for example, as refiners have been doing well recently. The company is poised to benefit from the proposed (and controversial) Keystone XL Pipeline, and has been investing in railcars to boost profits from the Bakken shale fields. It also spun off the promising CST Brands convenience-store business. A concern, though, is proposed legislation to reduce corn ethanol production, as Valero Energy Corporation (NYSE:VLO) is a major producer of it.

Natural gas specialist Cheniere Energy, Inc. (NYSEMKT:LNG) surged 84%, amid great expectations for its planned liquid natural gas (LNG) export terminal to ship gas procured relatively inexpensively here to regions where it fetches a much higher price. It’s facing greater competition lately, though, as more companies seek approval to transport natural gas to nations without free trade agreements with the U.S. If they win that, natural gas prices might rise in the U.S., and that could benefit another company in this gas and oil ETF: Chesapeake Energy Corporation (NYSE:CHK).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!