Comparing the International Oil ETF Plays

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.

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