What is the best energy etf

Screening Filters

1. Monthly Average Dollar Volume ≥ $500,000

   • Purpose: Ensure the ETFs are sufficiently liquid and tradable.
   • Rationale: When asking for the “best” energy ETF, liquidity is a core quality metric.
     • Higher dollar volume typically means tighter bid–ask spreads and easier entry/exit, especially for larger orders.
     • It avoids small, niche ETFs that may look good on paper but are hard or costly to trade in practice.

2. Sector = Energy

   • Purpose: Restrict results to ETFs whose primary sector exposure is energy.
   • Rationale:
     • This aligns directly with your request for an “energy ETF,” not a broad market or mixed-sector fund.
     • It filters out general commodity funds or diversified sector funds that only have partial energy exposure.

3. Themes = “Energy Equities”, “Oil & Gas”

   • Purpose: Focus on ETFs that invest in energy-related stocks, especially oil & gas companies.
   • Rationale:
     • “Energy Equities” ensures we’re looking at stock-based ETFs, not futures- or derivatives-only products that behave very differently.
     • “Oil & Gas” targets the core traditional energy segment that dominates the energy ETF universe, where most of the large, well-known “best-in-class” funds are found.
     • Together, these themes narrow the search to ETFs whose economic exposure is clearly tied to the energy industry rather than peripheral energy-related themes.

4. Expense Ratio ≤ 0.75%

   • Purpose: Exclude ETFs with excessively high fees.
   • Rationale:
     • Cost is a major determinant of long-term performance; a “best” ETF should not be unjustifiably expensive.
     • A 0.75% cap is high enough to include some specialized energy funds but low enough to filter out the most costly, niche products.
     • This increases the likelihood that candidates are reasonably efficient vehicles for gaining energy exposure.

5. Inception Date ≤ 2015-01-01

   • Purpose: Require a longer performance and behavior track record.
   • Rationale:
     • Older ETFs have lived through multiple market conditions (oil price crashes, recoveries, rate cycles, etc.).
     • This makes it possible to evaluate how the fund behaves across cycles, which is crucial when judging what might reasonably be considered “best.”
     • It avoids brand-new ETFs that may not have proven their tracking quality, liquidity, or risk characteristics yet.

Why Results Match Your Question

• The sector and theme filters directly target ETFs whose primary economic exposure is to energy, especially oil & gas equities—what most investors mean by an “energy ETF.”
• The liquidity filter (dollar volume) ensures that candidates are actually investable and practical to trade, which is an essential quality component.
• The expense ratio cap focuses the search on reasonably priced funds, improving the odds of finding ETFs that are competitive on net performance over time.
• The seasoned inception date filter ensures a sufficient history for evaluating performance, volatility, and tracking versus benchmarks—necessary inputs when trying to judge which might be “best.”

Together, these filters don’t guarantee a single “best” ETF—since “best” depends on your goals and risk tolerance—but they create a focused, high-quality universe of established, liquid, and cost-conscious energy ETFs from which a top choice can realistically be identified.