Energy exchange-traded funds (ETFs) are a great place to start if you want to invest in the energy sector. They offer instant access to the sector or sub-sector without requiring that you corner the market on energy company stocks, buy barrels of oil, or battle the pricing in an index basket.
These energy funds are sorted by investment type for advanced ETF investors who like to utilize inverse and leveraged exchange-traded funds and notes: Leveraged energy ETFs, inverse energy ETFs, and energy funds that are both leveraged and inverse. Keep in mind that available ETFs and exchange-traded notes (ETNs) can change by the day. Here's a place to start exploring the possibility of this type of investment.
Leveraged Energy ETFs
- DIG: ProShares Ultra Oil and Gas ETF (2x)
- ERX: Direxion Daily Energy Bull and Bear 2x Shares ETF (2x)
- GUSH: Direxion Daily S&P Oil & Gas Exploration & Production Bull and Bear 2x Shares ETF (2x)
Leveraged and Inverse Energy ETFs
- DRIP: Direxion Daily S&P Oil & Gas Exploration & Production Bull and Bear 2x Shares ETF (-2x)
- DUG: UltraShort Oil & Gas Pro Shares ETF (-2x)
- ERY: Direxion Daily Energy Bull and Bear 2x Shares ETF (-2x)
- KOLD: UltraShort Bloomberg Natural Gas ETF (-2x)
- SCO: Pro Shares UltraShort Bloomberg Crude Oil ETF (-2x)
A Word of Warning on Leveraged and Inverse ETFs
Using advanced and innovative strategies like leveraged and inverse funds is not for amateur investors. There are a lot of risks involved, and these types of funds can act very differently than other funds. Also, they're not without controversy. Thoroughly research the funds on this list if you're considering any of them. Look deeper into how leveraged and inverse ETFs work, and watch how they react to different market conditions, how they react to their benchmarks, and how they impact your portfolio.
Be sure to consult a financial professional, such as an advisor or your broker if you have any questions.
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.