The energy sector has long stood as an enduring force, shaping economies and influencing markets across the globe. For Canadian investors seeking exposure to this vital industry, Energy Exchange Traded Funds (ETFs) offer a strategic gateway. In this post, we delve into the best Canadian energy ETF s in Canada, spotlighting the most robust contenders. We are limiting our analysis to fund with over $100 million in assets under management.
We will discuss in this post their objectives, historical performance, Management Expense Ratios (MER), and portfolio breakdown.
Best Energy ETFs in Canada
| Symbol | Ticker | MER | AUM |
| iShares S&P/TSX Capped Energy | XEG | 0.60 | 2,100 |
| Ninepoint Energy Fund | NNRG.NE | 1.78 | 1,998 |
| Horizons Canadian Oil and Gas Equity Covered Call | ENCC | 0.84 | 150 |
| CI Energy Giants Cov Call ETF CAD H | NXF | 0.71 | 318 |
| BMO S&P/TSX Equal Weight Oil & Gas | ZEO | 0.60 | 208 |
Historical performance
XEG – iShares S&P/TSX Capped Energy (Best index ETF for the energy sector)
The goal of the iShares S&P/TSX Capped Energy Index ETF (XEG) is to let Canadian investors tap into the energy sector. It aims to mirror the S&P/TSX Capped Energy Index, which showcases how the Canadian energy market is doing.
This ETF includes companies involved in various energy-related activities, like searching for oil, producing energy, and distributing it. By investing in XEG, you can easily and affordably get a mix of different energy companies.
If you’re a Canadian investor interested in the energy industry, including both traditional energy and newer green energy companies, considering XEG could be a smart move. Keep in mind that XEG’s performance closely follows the underlying index, so how the energy sector does will affect how the ETF performs.
Portfolio
| Ticker | Name | Weight (%) |
| CNQ | CANADIAN NATURAL RESOURCES LTD | 24.72 |
| SU | SUNCOR ENERGY INC | 20.34 |
| CVE | CENOVUS ENERGY INC | 13.26 |
| TOU | TOURMALINE OIL CORP | 8.05 |
| IMO | IMPERIAL OIL LTD | 4.74 |
| ARX | ARC RESOURCES LTD | 4.62 |
| WCP | WHITECAP RESOURCES INC | 2.41 |
| MEG | MEG ENERGY CORP | 2.25 |
| CPG | CRESCENT POINT ENERGY CORP | 2.23 |
| PSK | PRAIRIESKY ROYALTY LTD | 2.04 |
Ninepoint Energy Fund (Best actively managed ETF)
NNRG is managed by Ninepoint Partners. It’s one of Canada’s leading alternative investment management firms overseeing approximately $8 billion in assets under management and institutional contracts. Ninepoint offers mutual funds and ETFs targeting various sectors. The Ninepoint Energy fund is offered in two versions: a Mutual fund and an ETF.
NNRG ETF invests primarily in mid-cap companies involved directly or indirectly in the exploration, development, production and distribution of oil, gas, coal, or uranium.
NNRG is an active ETF. The fund does not replicate an index. On the contrary, the portfolio manager selects stocks that best fit the funds’ stated objective. NNRG is suited for investment with high-risk tolerance.
Holdings
| Athabasca Oil Corp |
| Baytex Energy Corp |
| Canadian Natural Resources Ltd |
| Cenovus Energy Inc (Alberta) |
| Chord Energy Corp |
| Headwater Exploration Inc |
| Meg Energy Corp |
| Nuvista Energy Ltd. |
| Tamarack Valley Energy Ltd |
| Whitecap Resources Inc |
NXF CI First Asset Energy Giants ETF Unhedged and NXF-B CI First Asset Energy Giants Cov Call ETF
NXF operates as an actively managed exchange-traded fund (ETF) with a focus on the energy sector. Its investment strategy centers around the 15 most significant energy companies listed on the North American stock exchange. The core objectives of the fund encompass several key aspects:
This ETF aims to generate regular cash distributions to its investors on a quarterly basis. Additionally, it seeks to achieve capital appreciation by employing an equally weighted approach to investing in a diversified portfolio of equity securities. These securities belong to a minimum of the 15 largest energy companies, as determined by their market capitalization.
One of the key advantages that NXF strives to offer is the reduction of investment volatility. By carefully selecting and managing its investments, the fund aims to provide a level of stability in returns.
It’s important to note that NXF distinguishes itself as a currency-hedged ETF. This means that it employs strategies to mitigate the potential impact of currency fluctuations on its returns. On the other hand, its counterpart, NXF-B, does not incorporate such hedging mechanisms and is exposed to currency risk.
Portfolio
| Top holdings | (%) |
| EOG Resources Inc | 7.16% |
| ConocoPhillips | 7.07% |
| Hess Corp | 7.00% |
| Pioneer Natural Resources Co | 6.85% |
| Canadian Natural Resources Ltd | 6.82% |
| Eni SpA – ADR | 6.71% |
| Occidental Petroleum Corp | 6.71% |
| Petroleo Brasileiro SA Petrobras – ADR | 6.68% |
| BP PLC – ADR | 6.63% |
| TotalEnergies SE – ADR | 6.56% |
| Chevron Corp | 6.47% |
| Suncor Energy Inc | 6.43% |
| Equinor ASA – ADR | 6.39% |
| Shell PLC – ADR | 6.38% |
| Exxon Mobil Corp | 6.34% |
ZEO – BMO S&P TSX Eql Weight Oil Gas Index
The primary objective of the BMO Equal Weight Oil & Gas Index ETF (ZEO) is to closely mimic the performance of the Solactive Equal Weight Canada Oil & Gas Index. The fund achieves this by investing in and retaining the same Constituent Securities as the Index.
Portfolio
| Weight (%) | Name | Bloomberg Ticker |
| 12.79% | ARC RESOURCES LTD | ARX |
| 11.47% | TOURMALINE OIL CORP | TOU |
| 10.24% | KEYERA CORP | KEY |
| 10.23% | IMPERIAL OIL LTD | IMO |
| 10.07% | CANADIAN NATURAL RESOURCES LTD | CNQ |
| 9.99% | CENOVUS ENERGY INC | CVE |
| 8.81% | SUNCOR ENERGY INC | SU |
| 8.79% | PEMBINA PIPELINE CORP | PPL |
| 8.73% | TC ENERGY CORP | TRP |
| 8.70% | ENBRIDGE INC | ENB |
ENCC – Horizons Canadian Oil and Gas Equity Covered Call
ENCC is specifically crafted to cater to Canadian investors. Its central mission encompasses:
a) Providing an avenue for Canadian investors to access the performance of an index comprising domestic companies operating within the crude oil and natural gas industry. The current representation of this index is the Solactive Equal Weight Canada Oil & Gas Index.
b) Delivering monthly distributions that encompass dividend earnings and call option income, while factoring in expenses.
To effectively manage and potentially mitigate downward market risks while simultaneously generating income, ENCC will employ a dynamic covered call option writing strategy tailored to the preferences and needs of Canadian investors.
Portfolio
| Security Name | Weight |
| ARC Resources Ltd | 12.57% |
| Tourmaline Oil Corp | 11.60% |
| Keyera Corp | 10.62% |
| Canadian Natural Resources Ltd | 10.11% |
| Imperial Oil Ltd | 10.04% |
| Cenovus Energy Inc | 9.70% |
| Enbridge Inc | 9.10% |
| Pembina Pipeline Corp | 9.05% |
| Suncor Energy Inc | 8.76% |
