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10 Best Performing Energy ETFs in 2022

In this article, we discuss the 10 best performing energy ETFs in 2022. If you want to see more ETFs in this selection, check out 5 Best Performing Energy ETFs in 2022

As per the Economist Intelligence Unit, global energy consumption will increase by only 1.3% in 2023, due to a weakening economy and rampant energy prices. Low gas supplies and extreme weather conditions will push many countries to shift back to fossil fuels, which will defer the green energy transformation. 

Fitch Ratings has a neutral sector outlook for North American Energy Infrastructure in 2023 despite a slow economic backdrop, and economists expect a mild recession next year. Director Parker Montgomery wrote in a report dated December 6: 

“The sector largely finances projects with proven technology with newer advances often paired alongside proven technologies or placed in diverse portfolios.”

Although the price of West Texas Intermediate crude oil for immediate delivery has declined nearly 18% since mid-July, energy stocks in the Energy Select Sector SPDR ETF have climbed over 32% during the same period. Bespoke Investment Group told Bloomberg on November 29: 

“As crude prices have declined, they haven’t driven down energy stocks much, which is a surprise given how correlated energy relative performance was with crude until the summer.”

This hints at a significant change in how investors are viewing the overall prospects of energy companies. To benefit from the boom in the sector, investors can check out energy ETFs that provide exposure to the top performers in the sector like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and Pioneer Natural Resources Company (NYSE:PXD). 

Our Methodology 

We selected the following energy ETFs based on positive share price gains year-to-date as of December 7. These exchange traded funds were ranked according to their share price gains. We have discussed these ETFs in terms of their largest holdings, net assets, expense ratios, and benchmark indices.

Best Performing Energy ETFs in 2022

10. Invesco DWA Energy Momentum ETF (NASDAQ:PXI)

YTD Share Price Gain as of December 7: 37.88%

Invesco DWA Energy Momentum ETF (NASDAQ:PXI) tracks the performance and investment results of the Dorsey Wright Energy Technical Leaders Index. The ETF invests at least 90% of its total assets in the securities from the benchmark. The ETF and the Index are rebalanced and reconstituted quarterly. Invesco DWA Energy Momentum ETF (NASDAQ:PXI) was established in 2006 and offers a total expense ratio of 0.70%. The fund had 33 holdings as of December 6 and the 30-day SEC yield came in at 1.66%. 

Invesco DWA Energy Momentum ETF (NASDAQ:PXI)’s top holding is Texas Pacific Land Corporation (NYSE:TPL), a company engaged in the land and resource management, water services, and operations businesses. On December 6, Texas Pacific Land Corporation (NYSE:TPL) declared a $3.00 per share quarterly dividend, in line with previous. The dividend is payable on December 15, to shareholders of record on December 8. 

According to Insider Monkey’s data, Texas Pacific Land Corporation (NYSE:TPL) was part of 20 hedge fund portfolios at the end of Q3 2022, compared to 22 in the prior quarter. Murray Stahl’s Horizon Asset Management is the leading position holder in the company, with 1.5 million shares worth $2.6 billion. 

Like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and Pioneer Natural Resources Company (NYSE:PXD), Texas Pacific Land Corporation (NYSE:TPL) is one of the top energy stocks to monitor. 

LRT Capital made the following comment about Texas Pacific Land Corporation (NYSE:TPL) in its October investor letter:

“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Corporation (NYSE:TPL), meets that criterion. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry. The company has two main sources of income: 1) royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and 2) a water business which develops water resources and sells services to the fracking industry. We see TPL as an effective way to diversify the portfolio into a commodity exposed business that has a history of smart capital allocation and low risk of financial distress during periods of low oil prices. The company has no debt, and $281 million in cash. The company uses most of its cash flows to pay dividends and repurchase shares.”

9. iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ)

YTD Share Price Gain as of December 7: 43.91% 

iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ) seeks to track the investment results of Dow Jones U.S. Select Oil Equipment & Services Index, which is composed of U.S. equities in the oil equipment and services sector. As of December 6, iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ)’s net assets stood at $320 million and the portfolio had 26 holdings. The ETF’s total expense ratio came in at 0.39%. It is one of the best performing energy ETFs in 2022. 

Schlumberger Limited (NYSE:SLB) is iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ)’s largest holding. The company provides technology for the energy industry worldwide, operating through four divisions – Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. On November 18, Piper Sandler analyst Luke Lemoine raised the price target on Schlumberger Limited (NYSE:SLB) to $64 from $60 and maintained an Overweight rating on the shares. Estimates for most oilfield services companies were revised upward and money could continue to flow into the sector, the analyst told investors.

According to Insider Monkey’s database, 63 hedge funds were bullish on Schlumberger Limited (NYSE:SLB) at the end of September 2022, compared to 64 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with 27 million shares worth $971 million. 

Here is what ClearBridge Investments specifically said about Schlumberger Limited (NYSE:SLB) in its Q2 2022 letter:

“We further added to our positioning for the accelerating energy transition with the purchase of Schlumberger Limited (NYSE:SLB), a global provider of oilfield services. As a technology leader, Schlumberger should generate strong free cash flow over the next few years as the industry recovers, using its excess cash to gain market share from smaller players and to expand into new areas of growth. Through its scale, presence, partnerships and technology, Schlumberger is targeting expansion into new large addressable markets such as carbon capture, hydrogen, geothermal and lithium extraction.”

8. VanEck Oil Services ETF (NYSE:OIH)

YTD Share Price Gain as of December 7: 45.20%

VanEck Oil Services ETF (NYSE:OIH) seeks to replicate the price and yield performance of the MVIS US Listed Oil Services 25 Index, which tracks the overall performance of the American companies involved in oil services to the upstream oil sector, which include oil equipment, oil services, and oil drilling. VanEck Oil Services ETF (NYSE:OIH) has net assets of $2.3 billion and the portfolio has 25 holdings. The expense ratio came in at 0.35%. VanEck Oil Services ETF (NYSE:OIH)’s share price has gained over 45% year-to-date as of December 7, making it one of the best performing ETFs this year. 

Halliburton Company (NYSE:HAL), a Texas-based company that provides energy exploration and drilling equipment, is one of the primary holdings of VanEck Oil Services ETF (NYSE:OIH). On November 18, Halliburton Company (NYSE:HAL) declared a quarterly dividend of $0.12 per share, in line with previous. The dividend is payable on December 21, to shareholders of record on December 8. 

Piper Sandler analyst Luke Lemoine on November 18 raised the firm’s price target on Halliburton Company (NYSE:HAL) to $48 from $43 and reiterated an Overweight rating on the shares.

According to Insider Monkey’s third quarter database, 48 hedge funds were long Halliburton Company (NYSE:HAL), compared to 43 funds in the last quarter. Richard S. Pzena’s Pzena Investment Management is the largest position holder in the company, with 15.6 million shares worth $384.5 million. 

Aristotle Atlantic made the following comment about Halliburton Company (NYSE:HAL) in its Q3 2022 investor letter:

“Halliburton Company (NYSE:HAL) provides energy, engineering and construction services and is a manufacturer of products for the energy industry. The company offers services and products and integrated solutions to customers in the exploration, development, and production of oil and natural gas. Halliburton operates two business segments: Completion & Production and Drilling & Evaluation.

Our conviction in longer-term operating leverage is supported by the focus on improving cost structures. Upstream oil and gas spending over the longer term can benefit Exploration & Production (E&P) firms from sustained high oil and gas prices and a renewed urgency in global energy security. We believe the rightsizing of the company’s cost structure and forward focus on margins at the same time as E&Ps respond to new investment signals will drive both topline and bottom-line growth.”

7. Invesco S&P 500 Equal Weight Energy ETF (NYSE:RYE)

YTD Share Price Gain as of December 7: 45.23%

Invesco S&P 500 Equal Weight Energy ETF (NYSE:RYE) is a large-cap sector fund that tracks the investment results of the S&P 500 Equal Weight Energy Index. The ETF has a weighted average market cap of $79.51 billion and the portfolio has 24 total holdings. The expense ratio of Invesco S&P 500 Equal Weight Energy ETF (NYSE:RYE) came in at 0.40%. With share price gaining over 45% year-to-date as of December 7, it is one of the best performing ETFs of 2022. 

Phillips 66 (NYSE:PSX) is one of the top holdings of Invesco S&P 500 Equal Weight Energy ETF (NYSE:RYE). Phillips 66 (NYSE:PSX) is an energy manufacturing and logistics company and it operates through four segments – Midstream, Chemicals, Refining, and Marketing and Specialties. On November 9, the company announced that it plans to return an additional $10 billion-$12 billion to shareholders by the end of 2024 through a combination of dividends and share repurchases. The board also authorized a $5 billion increase to its share repurchase program, bringing the total amount of share repurchases authorized since 2012 to $20 billion.

According to Insider Monkey’s data, 34 hedge funds were bullish on Phillips 66 (NYSE:PSX) at the end of September 2022, compared to 38 funds in the last quarter. D E Shaw is the largest stakeholder of the company, with 3.10 million shares worth $250.3 million. 

6. iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO)

YTD Share Price Gain as of December 7: 47.18%

iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO) aims to track the investment results of Dow Jones U.S. Select Oil Exploration & Production Index, which consists of U.S. equities in the oil and gas exploration and production sector. As of December 6, iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO)’s net assets came in at $1.10 billion. The ETF offers a 30-day SEC yield of 2.12% and an expense ratio of 0.39%. The portfolio consists of 49 equities. 

ConocoPhillips (NYSE:COP) is the largest holding of iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO). It is a Texas-based company that explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids worldwide. On November 29, ConocoPhillips (NYSE:COP) and QatarEnergy announced an agreement to supply 2 million metric tons of liquefied natural gas per year to Germany for 15 years starting from 2026, as Germany looks to exit its energy relationship with Russia.

According to Insider Monkey’s data, 64 hedge funds held long positions in ConocoPhillips (NYSE:COP) at the end of September 2022, compared to 71 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with approximately 7 million shares worth $708.5 million. 

In addition to Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and Pioneer Natural Resources Company (NYSE:PXD), ConocoPhillips (NYSE:COP) is one of the energy stocks favored by elite investors. 

ClearBridge Investments made the following comment about ConocoPhillips (NYSE:COP) in its Q3 2022 investor letter:

“ConocoPhillips (NYSE:COP) handily outperformed the energy sector, which led the value benchmark. Its exposure to natural gas helped the stock perform more in line with natural gas E&Ps, which led the sector due to the European energy crisis and U.S. shale gas being considered a secure long-term source of liquid natural gas. In addition to COP’s low-cost resource base, conservative balance sheet and experienced management team, we appreciate its strong focus on ESG measures, which we believe is a good indicator of the quality of a company’s business model and management team.

Specifically, we appreciate solid governance practices with compensation metrics emphasizing ROCE and relative total shareholder return, the board’s effective oversight of management as well as the company’s methane flaring leadership. COP is investing in field electrification and carbon capture across its portfolio, with ambitions to deliver oil production with a CO2 intensity of sub-5 kg/BOE, which would be one of the lowest emission sources of supply in the world.”

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Disclosure: None. 10 Best Performing Energy ETFs in 2022 is originally published on Insider Monkey.

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