Introduction
Find out about the 5 best energy ETFs to buy in 2025: which are Vanguard and iShares funds. Learn about costs, market capitalization, performance, and dividend options so that you can make informed and successful decisions regarding your investments.
Energy industry is one of the most significant industry in today’s global economy as it supplies energy and energy related products to other industries. With the transition of the global economy to green energy and renewable sources, entry to the energy sector for using ETFs is becoming more possible. ETFs provide access to different sort of energy which includes renewable energy and up and coming sectors as well as established oil and gas companies. Income investors, dividend-paying investors, and growth investors hunting for future profits are the possible investors of these funds. This article will put forward five energy ETFs by 2025 in terms of performance, cost, market influence, and convenience to improve particular investment goals.
Key Takeaways
1. Discover top energy ETFs: We’ll feature three accumulating ETFs for reinvested growth and two distributing ETFs for dividend-focused investors.
2. Costs and market caps: A comparison of expense ratios, market capitalization, and fund sizes of the ETFs.
3. Performance insights: Explore the historical performance of each ETF to make an informed choice.
4. Answers to key questions: Find out the best energy ETF to buy and the largest energy ETF globally.
Best Energy ETFs to Buy in 2025
| Vanguard Energy ETF (VDE) | |
| Type | Accumulating |
| Expense Ratio | 0.10% |
| Market Cap | $8.25 billion |
| iShares Global Energy ETF (IXC) | |
| Type | Accumulating |
| Expense Ratio | 0.41% |
| Market Cap | $2.1 billion |
| Vanguard ESG Global Energy ETF (VEGG) | |
| Type | Accumulating |
| Expense Ratio | 0.58% |
| Market Cap | $1.4 billion |
| iShares U.S. Energy ETF (IYE) | |
| Type | Distributing |
| Expense Ratio | 0.39% |
| Market Cap | $1.3 billion |
| Dividend Yield | 2.75% |
| SPDR S&P Oil & Gas Exploration & Production ETF (XOP) | |
| Type | Distributing |
| Expense Ratio | 0.35% |
| Market Cap | $2.3 billion |
| Dividend Yield | 2.39% |
Performance Insights
Vanguard Energy ETF is among the most popular ETFs with assets of approximately $8.25 billion and exceptionally low expense ratio of 0.10%. It provides an inexpensive approach to investing in the US oil and gas companies such as Exxon Mobil and Chevron. The Buy-and-Hold strategy does not announce dividend payouts, providing compounded returns instead. This makes it appropriate for long-term related businesses and investors who wish to strike it big. The new energy industry in the US guarantees the availability of an energy fund for the year 2025, thus makes it the right investment. [1]
Find out our price prediction for Exxon Mobil Stock Forecast 2025: Fair Valuation.
iShares U.S. Energy ETF (IYE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) can be considered other good options since oil and gas dividend yield is higher in the US industry at 2.75% that can be attributed to high performance and diversification of energy segment companies in America. [2].
The fact that XOP targets the high-growth exploration and production category and has a return of 2.39% indicates that it is slightly riskier than other investments, but it may be more lucrative during times of expansion in the energy market. Distributing exchange-traded funds, on the other hand, provide income and modest expenses of only 0.39% and 0.35% respectively, while simultaneously providing prospects for growth that are driven by the market (market driven). As a result of their fixed dividends, they are an excellent choice for investors who are looking for a reliable source of income from the energy sector. [3]
What is the best energy ETF to buy?
For investors looking for an affordable energy exchange-traded fund with minimal fees, Vanguard Energy ETF is a great choice. With a market valuation of $8.25 billion and an expense ratio of 0.10%, the VDE provides investors with equal weight exposure to the biggest US energy companies, including ExxonMobil and Chevron. The reality about dividends is that they build up and are subsequently reinvest in the business, which has a compounding impact and greatly helps long-term investors.
Additionally, stability and growth potential linked to fluctuations in the price of natural gas and oil are made possible by the presence of VDE in all facets of the energy sector. According to the aforementioned historical performance, Omite performs better than many of its contemporaries, demonstrating the strength of the US energy market. VDE is the key to establishing an initial investment in the energy stock sector that would be suitable for 2025 and the foreseeable future if income level is the main factor taken into account when evaluating a portfolio as an investment tool to generate capital gains and a low-cost investment. [4]
What is the Largest Energy ETF in the World?
With over $43.4 billion in total assets as of 2025, the Energy Select Sector SPDR Fund (XLE) is the largest energy ETF in the world. XLE tracks the performance of the Energy Select Sector Index, which consists of large-cap energy stocks of US businesses, including market leaders like Chevron and ExxonMobil. Many investors who want to invest in the energy sector use it as their reference fund due to these features.
XLE is an ETF that distributes dividends to shareholders on a regular basis, making it ideal for investors who wish to generate income in addition to capital gains. This is on top of its exceptionally sound liquidity and comparatively low expense ratio of as low as 0.10%. For this reason, the ETF generates profits during periods of rising oil prices, which are cyclical to the energy markets and frequently yield premiums. As the industry leader and the vehicle with a proven track record of performance, XLE remains a crucial component of investment strategy aimed at the energy sector. [5]
Conclusion
One of the best investing options for those seeking a widely diversified entry point into a significant area of the global economy is an energy exchange-traded fund (ETF). Certain funds allow investors to benefit from the expansion of conventional energy sectors like natural gas and oil as well as emerging trends in renewable resources without being exposed to the associated business risks. There are energy ETFs that provide ways to meet your needs, whether you’re using fixed income or reinvested growth. The fact that accumulating ETFs, for instance, reinvest dividends to boost overall long-term gains, exacerbates this.
However, investors that plan to make frequent transactions favor distributing ETFs since they generate consistent income through daily or regular dividend payments. In order to build a balanced, diversified portfolio for 2025 and beyond, investors analyze market capitalization, expense ratios, and historical trends to select energy exchange-traded funds (ETFs) that can assist them in reaching their financial objectives and managing the risk associated with the energy sector.
**Please be informed that the content is informational and by no means serve as a buy or sell signal. The company is not responsible for the loss of capital.
