5 Best Energy ETFs: Top Oil, Gas and Renewable Energy Funds

In this article, we discuss 5 best energy ETFs to buy. If you want to read our discussion on the energy sector, head directly to 11 Best Energy ETFs: Top Oil, Gas and Renewable Energy Funds. 

5. iShares U.S. Oil & Gas Exploration & Production ETF (CBOE:IEO)

5-Year Share Price Performance as of March 14: 76.52%

iShares U.S. Oil & Gas Exploration & Production ETF (CBOE:IEO) is one of the best energy ETFs to invest in. iShares U.S. Oil & Gas Exploration & Production ETF (CBOE:IEO) aims to replicate the performance of the Dow Jones U.S. Select Oil Exploration & Production Index, which comprises US equities in the oil and gas exploration and production sector. Established on May 01, 2006, the ETF offers targeted access to domestic oil and gas stocks. As of March 13, 2024, iShares U.S. Oil & Gas Exploration & Production ETF (CBOE:IEO) holds a portfolio of 47 stocks with net assets exceeding $708 million, featuring a net expense ratio of 0.40%.

EOG Resources, Inc. (NYSE:EOG) is one of the top holdings of iShares U.S. Oil & Gas Exploration & Production ETF (CBOE:IEO). EOG Resources, Inc. (NYSE:EOG) is an energy company that operates in the exploration, development, production, and marketing of crude oil, natural gas liquids, and natural gas. On February 22, EOG Resources, Inc. (NYSE:EOG) declared a $0.91 per share quarterly dividend, in line with previous. The dividend is payable on April 30, to shareholders on record as of April 16. 

According to Insider Monkey’s fourth quarter database, 42 hedge funds were long EOG Resources, Inc. (NYSE:EOG), compared to 45 funds in the last quarter. Harris Associates is the largest stakeholder of the company, with 7.28 million shares worth $881 million. 

Artisan Value Fund stated the following regarding EOG Resources, Inc. (NYSE:EOG) in its fourth quarter 2023 investor letter:

“On the downside in Q4, our two energy holdings, Schlumberger, the world’s largest oil services company, and EOG Resources, Inc. (NYSE:EOG), a US shale-focused E&P company, were weak along with the broader sector. EOG is one of the highest quality operators in the E&P space. EOG has a low-cost production position with a strong reserve base, giving it an advantage versus peers. Further, EOG’s management has long focused on return on invested capital and cash flow generation, distinguishing it from many of the company’s competitors, which prioritize growth over profitability. Its commitment to return excess capital to shareholders via regular and special dividends is also highly appealing, particularly in a period of rising interest rates. The company has proven its ability to create economic value for shareholders, even over the past decade that included the toughest energy commodity environment of the last 30+ years. The company’s strong balance sheet enabled it to increase production capabilities during the prior downturn.”

4. Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE)

5-Year Share Price Performance as of March 14: 79.57%

Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE) is based on the Dynamic Energy Exploration & Production Intellidex Index, comprising securities from 30 US companies involved in exploring and producing natural resources for energy. Launched on October 26, 2005, Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE)’s portfolio holds 32 stocks with an expense ratio of 0.60% as of March 12, 2024. Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE) is one of the best energy ETFs. 

Valero Energy Corporation (NYSE:VLO) is the top holding of Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE). Valero Energy Corporation (NYSE:VLO) manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products worldwide. On January 25, the company reported a Q4 non-GAAP EPS of $3.55 and a revenue of $35.41 billion, outperforming Wall Street estimates by $0.60 and $860 million, respectively. 

According to Insider Monkey’s fourth quarter database, 47 hedge funds were bullish on Valero Energy Corporation (NYSE:VLO), compared to 44 funds in the prior quarter. Cliff Asness’ AQR Capital Management is the largest stakeholder of the company, with 1.7 million shares worth $220.4 million. 

3. SPDR Kensho Clean Power ETF (NYSE:CNRG)

5-Year Share Price Performance as of March 14: 82.00%

SPDR Kensho Clean Power ETF (NYSE:CNRG) aims to mirror the performance of the S&P Kensho Clean Power Index before fees and expenses. This index utilizes artificial intelligence and a quantitative weighting approach to identify companies driving innovation in the clean energy sector, including solar, wind, geothermal, and hydroelectric power. Established on October 22, 2018, the ETF’s portfolio consists of 49 stocks with an expense ratio of 0.45%. SPDR Kensho Clean Power ETF (NYSE:CNRG) is one of the best energy ETFs to buy. 

Nextracker Inc. (NASDAQ:NXT) is the largest holding of SPDR Kensho Clean Power ETF (NYSE:CNRG). Nextracker Inc. (NASDAQ:NXT) is a global energy solutions company specializing in solar tracker and software solutions for utility-scale and ground-mounted distributed generation solar projects. On January 31, the company announced financial results for the third quarter ended December 31, 2023. Nextracker reported a non-GAAP EPS of $0.96 and a revenue of $710.43 million, exceeding Wall Street estimates by $0.47 and $92.94 million, respectively. 

According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Nextracker Inc. (NASDAQ:NXT), compared to 26 funds in the last quarter. 

2. Invesco Solar ETF (NYSE:TAN)

5-Year Share Price Performance as of March 14: 82.64%

Invesco Solar ETF (NYSE:TAN) tracks the MAC Global Solar Energy Index, which includes companies operating in the solar energy industry. Rebalanced quarterly, the ETF was established on April 15, 2008, and features an expense ratio of 0.67% as of March 12, 2024. Its portfolio comprises 45 stocks. Invesco Solar ETF (NYSE:TAN) is one of the best energy ETFs to monitor. 

First Solar, Inc. (NASDAQ:FSLR) is one of the top holdings of Invesco Solar ETF (NYSE:TAN). It is a solar technology company that operates globally, providing photovoltaic solar energy solutions. On February 27, First Solar, Inc. (NASDAQ:FSLR) reported a Q4 GAAP EPS of $3.25, beating market estimates by $0.13. The revenue of $1.16 billion, however, fell short of Wall Street consensus by $160 million. 

According to Insider Monkey’s fourth quarter database, 47 hedge funds were long First Solar, Inc. (NASDAQ:FSLR), compared to 49 funds in the prior quarter. 

1. First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ:GRID)

5-Year Share Price Performance as of March 14: 153.65%

First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ:GRID) aims to mirror the performance of the Nasdaq Clean Edge Smart Grid Infrastructure Index. This index tracks common stocks in the grid and electric energy infrastructure sector, including companies engaged in electric grid, meters, networks, energy storage, and enabling software for smart grid infrastructure. Established on November 16, 2009, First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ:GRID) features an expense ratio of 0.57% and holds a portfolio of 101 stocks. It ranks 1st on our list of the best energy ETFs. 

Eaton Corporation plc (NYSE:ETN), an Ireland-based power management company, is the largest holding of First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ:GRID). On February 29, Eaton Corporation plc (NYSE:ETN) declared a $0.94 per share quarterly dividend, a 9.3% increase from its prior dividend of $0.86. The dividend is payable on March 29, to shareholders on record as of March 11. 

According to Insider Monkey’s fourth quarter database, 63 hedge funds were long Eaton Corporation plc (NYSE:ETN), compared to 55 funds in the last quarter. Philippe Laffont’s Coatue Management is the largest stakeholder of the company, with nearly 4 million shares worth $960 million. 

ClearBridge Sustainability Leaders Strategy made the following comment about Eaton Corporation plc (NYSE:ETN) in its Q3 2023 investor letter:

“While renewable stocks have come under pressure of late, energy efficiency and decarbonization remain strong drivers for our industrials holdings, where Eaton Corporation plc (NYSE:ETN) and Trane Technologies (TT) were strong contributors. Eaton, whose electrical equipment enables the electrification of the power grid and electrical vehicle charging infrastructure, is benefiting from tax incentives supporting clean energy, growth in reshoring and expanding manufacturing in North America and the need for grid resiliency amid broad demand for electrification.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 10 Stocks George Soros and Insiders Are Crazy About and 15 Best Stocks Under $100 To Buy Now.