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Top 10 Best Energy ETFs To Buy Now

By Amarendra Bhushan for CEOWORLD Magazine Updated:June 28, 2010

ETFs are flexible and easy to trade. Investors buy and sell them like stocks, typically through a brokerage account. Investors can also employ traditional stock trading techniques; including stop orders, limit orders, margin purchases1, and short sales using ETFs. They are listed on major US Stock Exchanges.

SPDR S&P Oil & Gas Exploration & Production Fund (XOP)- The investment seeks to replicate as closely as possible, before expenses, the performance of an index derived from the oil and gas exploration and production segment of a U.S. total market composite index. The fund uses a passive management strategy to track the total return performance of the S&P Oil & Gas Exploration & Production Select Industry index. The index is derived from the oil and gas exploration and production portion of the S&P Total Market index. It is an equal weighted market cap index. The fund is nondiversified.

JP Morgan Alerian MLP Index ETN (AMJ)- JPMorgan Alerian MLP Index Exchange Traded Notes (“ETNs”) provide investors a convenient way to gain exposure to midstream energy MLPs. The ETNs pay a variable quarterly coupon linked to the cash distributions paid on the MLPs in the index, less accrued tracking fees. The ETN coupons are reported on Form 1099s and therefore eliminate the administrative burden associated with K-1 forms. Investors can trade the ETNs on the NYSE, Arca exchange or receive a cash payment at the scheduled maturity or upon early repurchase, based on the performance of the index. The ETNs are senior, unsecured obligations of JPMorgan Chase & Co.

PowerShares Dynamic Energy Exploration & Production Fund (PXE)- The investment seeks investment results that correspond generally to the price and yield (before the Fund’s fees and expenses) of an equity index called the Dynamic Energy Exploration & Production Intellidex(SM) index. The fund normally invests at least 80% of total assets in common stocks of companies engaged in energy exploration and production. In pursuit of its objective, the fund may invest at least 90% of total assets in common stocks that comprise the Energy Exploration & Production Intellidex. It is nondiversified.

Energy Select Sector SPDR (XLE)- The investment includes companies from the following industries: oil, gas, energy equipment & services. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. The Funds have adopted a policy that requires each fund to provide shareholders with at least 60 days notice prior to any significant material change in a fund’s policy or its underlying index. It is nondiversified.

Oil Services HOLDRs (OIH)- The investment seeks to diversify your investments in the oil service industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. The investment holds shares of common stock issued by specified companies that, when initially selected, were involved in the oil service industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the group of companies will not change. There are currently 18 companies included in the investment.

Vanguard Energy ETF (VDE)- The investment seeks to track the performance of a benchmark index that measures the investment return of energy stocks. The fund employs a passive management investment approach to track the performance of the MSCI US Investable Market Energy Index, an index made up of stocks of large, medium-size, and small U.S. companies within the energy sector.

iShares S&P Global Energy (IXC)- The investment seeks investment results that correspond closely to the performance, before fees and expenses, of the S&P Global Energy Sector index. The fund generally invests at least 90% of assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of assets in securities not included in the underlying index but which the Advisor believes will help the fund track the underlying index.

First Trust ISE-Revere Natural (FCG)- The investment seeks to replicate, net of expenses, the ISE-REVERE Natural Gas index. The fund invests at least 90% of assets in common stocks that comprise the index. The index is an equal-weighted index that consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas. The fund is nondiversified.

Market Vectors Coal ETF (KOL)- The investment seeks replicate as closely as possible, before fees and expenses, the price and yield performance of the Stowe Coal index. The fund normally invests at least 80% of total assets in equity securities, which may include depositary receipts, of U.S. and foreign companies principally engaged in the coal industry. It normally invests at least 95% of total assets in securities that comprise the index. It is nondiversified.

iShares S&P North Amer Natural (IGE)- The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P North American Natural Resources Sector index. The fund generally invests at least 90% assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of assets in securities not included in the underlying index but which BGFA believes will help the fund track its underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents. The fund is nondiversified.

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