Energy-equity funds are getting the job done for investors.
Today the Wall Street Journal and other sources are reporting that militants have taken control of a key petroleum-producing region of Iraq—threatening supply disruptions. Monday the International Energy Agency projected a doubling of Chinese natural gas demand in coming years. Meanwhile, Gazprom continues to threaten supply restrictions to Ukraine and Western Europe.
Aside from demand projections and supply disruptions, energy is a basic requirement for economic growth and, consequently, an important investment theme. Fortunately, two ETFs make it easy to harness the energy investment theme.
The iShares Global Energy ETF (IXC | A-89) tracks a market-cap-weighted index of global energy companies. Investors get access to the big names like Exxon, Royal Dutch Shell and Chevron, but also smaller companies like Cairn Energy—a European oil and gas exploration and development company.
For a more targeted focus, investors might consider the First Trust ISE-Revere Natural Gas ETF (FCG | A-99). FCG tracks an equal-weighted index of U.S. companies that derive a substantial portion of revenues from the exploration and production of natural gas.