Comparing the International Oil ETF Plays
February 15th, 2011 at 6:00am by Tom Lydon
Oil exchange traded funds (ETFs) are so varied that it is possible to play a completely global fund, and forgo any domestic exposure.
ETFs that track international energy companies are a bit more interesting in terms of mix of holdings and can give a portfolio the diversity you need, reports the ETF Professor. [Energy ETFs Surge As Oil Tops $100.]
Perhaps the fact that earlier this week, Barron’s named Royal Dutch Shell (NYSE: RDS-A) as one of its preferred oil picks, thanks to its reasonable valuation and attractive dividend. and with that company’s reasonable valuation and nice dividend yield, this give m ore of a case for international oil companies. [Oil Driller ETFs Get a Lift From Merger Activity.]
A rundown of the two international oil play ETFs:
- WisdomTree International Energy ETF (NYSEArca: DKA) Offers 7% to Shell while BP was booted after the oil spill, which might appeal to socially-conscious investors. DKA will get you involved with Cnooc (NYSE: CEO), China’s largest offshore oil exploration firm. The United Kingdom and Australia are the top two countries in this fund with each getting a 15% weighting. France comes in at 12%.
- SPDR S&P International Energy Sector ETF (NYSEArca: IPW) This offers exposure to some of the biggest oil sands players, as well as decent exposure to two Shell stocks. BP is also a top holding and Chinese firms are absent. The United Kingdom and Canada are the top countries here, and they account for 60% of the fund’s weight. France, as in DKA, gets a 12.1% weighting.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.