Reviewed by Sep 30, 2020| Updated on
Energy ETF is based on underlying commodities such as crude oil and natural gas, securities of oil and energy sector companies. Energy ETF may also be based on alternative forms of energy such as clean energy (such as wind and solar).
The ETFs may be based on stocks of domestic companies or foreign companies. The index fund may be based on different types of sectors or different countries. Companies manufacturing power equipment, generating and distributing power are among the different sectors that may be included.
Energy ETF is a hybrid equity instrument and can include an entire sector index, both domestic and international energy producers. Energy ETFs are popular among almost all types of investors, small and big. Also, the energy sector represents an important part of any economy. The energy sector companies have a high allocation in the broad market indices such as BSE Sensex, S&P 500.