7 Best Energy ETFs to Buy Now

The supermajors of the energy sector, often referred to as Big Oil, tend to have stronger margins and more resilient balance sheets than their smaller competitors. Still, they remain tied to the boom-and-bust cycles of the broader energy market.

This dynamic was on display Aug. 1 when Exxon Mobil Corp. (ticker: XOM) and Chevron Corp. (CVX) both reported earnings. Each company beat expectations for earnings per share but posted declines in revenue and net income, largely due to falling crude oil prices.

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These results highlight why betting solely on the largest names in the sector isn’t always the most reliable approach. For investors seeking diversified exposure to energy instead of relying on the performance of a few major players, energy sector exchange-traded funds, or ETFs, can offer a more appealing route.

Some ETFs provide broad exposure to U.S.-based majors, including familiar names like Exxon, Chevron and ConocoPhillips (COP). Others focus on specific parts of the energy value chain such as upstream, midstream or downstream operators.

“The main benefits of owning an energy ETF are not having to guess which company will outperform and reducing concentration risk by owning a broad basket of companies,” says Curtis Congdon, president of XML Financial Group.

Here are seven of the best energy ETFs to buy today:

ETF	Expense Ratio
Energy Select Sector SPDR Fund (XLE)	0.08%
Vanguard Energy ETF (VDE)	0.09%
iShares Global Energy ETF (IXC)	0.40%
Invesco S&P 500 Equal Weight Energy ETF (RSPG)	0.40%
Tortoise Energy Fund (TNGY)	0.85%
Tortoise North American Pipeline Fund (TPYP)	0.40%
VanEck Oil Services ETF (OIH)	0.35%

Energy Select Sector SPDR Fund (XLE)

“We prefer energy ETFs that are market-capitalization weighted versus equal weighted,” says Adam Grossman, global equity chief investment officer at RiverFront Investment Group. “We prefer this because we believe larger companies will have better access to capital and are more likely to have diversified businesses at the margin.” Energy investors who agree with Grossman may prefer XLE.

This ETF tracks the Energy Select Sector Index, which holds 22 large-cap energy stocks selected from the S&P 500. Because it is market-cap weighted, larger companies receive a bigger allocation. Exxon Mobil represents 23% of the portfolio, and Chevron makes up another 18%. XLE is also one of the cheapest ways to gain broad exposure to U.S. energy giants, with a low 0.08% expense ratio.

Vanguard Energy ETF (VDE)

“Vanguard has a popular offering in VDE that provides low-cost, high-yield, diversified exposure to companies involved in the exploration and production of energy products,” Congdon says. This ETF is slightly pricier than XLE at a 0.09% expense ratio, but is more diversified with 115 holdings thanks to its benchmark, the MSCI US Investable Market Energy 25/50 Index.

Unlike XLE, VDE isn’t limited to the S&P 500’s energy stocks. By tracking a more expansive benchmark, VDE is able to emphasize more of the mid- and small-cap players in the energy sector. However, it remains market-cap weighted, so giants like Exxon Mobil and Chevron still dominate the top holdings, albeit in slightly lower proportions compared to XLE. The ETF pays a decent 3.1% 30-day SEC yield.

iShares Global Energy ETF (IXC)

The energy sector extends well beyond U.S. borders. While the U.S. remains a major global producer outside of OPEC+, other countries play key roles. The U.K. is home to Shell PLC (SHEL) and BP PLC (BP). Canada contributes with Canadian Natural Resources Ltd. (CNQ) and Enbridge Inc. (ENB). Norway’s Equinor ASA (EQNR) and Brazil’s Petróleo Brasileiro SA (PBR) are also notable players.

Many of these companies are either dual-listed on U.S. exchanges or available through American depositary receipts, but the most diversified way to own them all is through IXC. This ETF tracks the S&P Global 1200 Energy 4.5/22.5/45 Capped Index and includes both international names and major U.S. energy stocks. However, its global scope comes with a higher 0.4% expense ratio.

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Invesco S&P 500 Equal Weight Energy ETF (RSPG)

“By equally weighting, RSPG provides a bias toward the smaller stocks in the S&P 500 energy sector,” says Nick Kalivas, head of factor and core equity ETF strategy at Invesco. “It underweights the largest names in the sector like Exxon Mobil and Chevron, while the quarterly rebalancing to equal weight also provides a value tilt.” This ETF can provide higher exposure to up-and-coming energy companies.

“Equal weighting can provide broader exposure to the energy sector and allow investors to better experience broad industry fundamentals,” Kalivas says. “Optimism over deregulation in the energy sector may also increase the profitability of smaller companies, although the price of oil remains a dominant factor.” However, investors should be comfortable with higher volatility from small caps.

Tortoise Energy Fund (TNGY)

“Despite recent concerns around tariffs and broader economic uncertainty, the U.S. is steadily solidifying its position as a global energy superpower,” says Mark Marifian, head of product management at Tortoise Capital. “AI-driven data centers are rapidly becoming the next major industrial energy consumers, and low-emission, dispatchable fuels like natural gas are emerging as essential.”

Unlike the previous ETFs, TNGY does not track an index. This fund is actively managed, with the ability to enhance income by selling covered calls and allocating to energy sector bond investments. The current portfolio features a midstream, infrastructure-heavy focus but does have allocations to select integrated supermajors like Exxon Mobil. However, the active management comes at a higher 0.85% expense ratio.

Tortoise North American Pipeline Fund (TPYP)

“Record-setting U.S. natural gas exports continue to expand America’s role in global energy markets,” Marifian explains. “These intersecting forces are fueling a new investment cycle across the energy value chain and positioning U.S. midstream infrastructure as a strategic asset for global energy security.” For a pure-play midstream focus, Tortoise Capital offers TPYP at a 0.4% expense ratio.

“With nearly three-quarters of the portfolio focused on natural gas pipeline operators and local distribution companies, TPYP is well positioned to benefit from increased domestic consumption and surging liquefied natural gas exports,” Marifian explains. The ETF owns both incorporated pipeline operators and master limited partnerships (MLPs), but does not produce a Schedule K-1 tax form.

VanEck Oil Services ETF (OIH)

“Oil services companies are essential to sustaining and expanding global oil and gas production,” says Brandon Rakszawski, vice president and director of product management at VanEck. “Amid a backdrop of persistent geopolitical tensions and a renewed emphasis on energy security, these companies are well positioned to benefit from elevated drilling activity and rising capital expenditures.”

Oil services companies provide the drilling equipment, engineering and field support that energy producers rely on to extract hydrocarbons. “OIH emphasizes established industry leaders such as Schlumberger Ltd. (SLB), Halliburton Co. (HAL) and Baker Hughes Co. (BKR), firms that dominate global service capacity across onshore, offshore and deep-water operations,” Rakszawski says.

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7 Best Energy ETFs to Buy Now originally appeared on usnews.com

Update 08/06/25: This story was published at an earlier date and has been updated with new information.