5 Blockbuster Energy ETF Trades You Must Enter Immediately

5 Blockbuster Energy ETF Trades You Must Enter Immediately


-- updated May 17, 2011

Trade #1: Jefferies TR/J CRB Wildcatters (WCAT) – closed 5/17 at $48.66



The recent pullback in oil prices to just under $100 a barrel has created a great, short-term buying opportunity in oil-related ETFs.

Of course, there has also been plenty of backlash – from Congress and in the mainstream media – directed at “Big Oil”.

So this ETF – the Jefferies TR/J CRB Wildcatters ETF (WCAT) – is a perfect investment in the oil industry that prevents you from any backlash against outsized profits from “Big Oil.”

This ETF is dedicated to investing in companies in the “wildcatter” sector. These are the firms – mostly smaller in size – that specialize in finding oil & gas deposits in places where it was thought not to exist.

This investment is a perfect example of the power of ETFs. To invest in individual wildcatter companies would be incredibly speculative. You’d expose yourself to plenty of risk – not to mention volatility – if you were to use the “needle-in-a-haystack” approach.

By investing in WCAT – and in particular, at this price – you get to enjoy the potential rewards of a continued strong oil market without the backlash (politically & otherwise) against Big Oil’s high profits.


Trade #2: PowerShares Global Clean Energy Portfolio (PBD) – closed 5/17 at $14.43



Clean energy will no doubt remain in the news for many years to come…but between now and the November 2012 election, there will be enormous emphasis on this area in the U.S.

This fund gives you the upside of green energy profits without forcing you to “bet” on any single technology. The fund invests in nearly 100 companies, with concentration in utilities, industrials and IT firms.

Before the market collapse of 2008, this fund was trading above the $30 level – and after bottoming out at $9 in November of that year, it has slowly climbed back above the $14 level.

The continued emphasis on green energy means that this sector should remain in a growth mode for several years – and PBD is the Exchange Traded Fund best positioned to help you take advantage of that growth.


Trade #3: Guggenheim Canadian Energy Income ETF (ENY) – closed 5/17 at $20.93




Remember – in spite of the recent pullback in the energy sector, the fundamentals remain overwhelmingly strong.

Each selloff – like the one we saw during the first week in May – presents an opportunity for savvy energy investors to jump in and take advantage of bargains.

The Guggenheim Canadian Energy Income ETF (ENY) presents a tremendous opportunity to profit from higher oil prices while at the same time limiting your risk in the event that U.S. producers take a step backward.

The fund tracks the Sustainable Canadian Energy Income Index, which selects companies from a universe of 25 Canadian royalty trusts and 20 oil-sands resource producers.

And thanks to the fund’s unique tactical allocation model shifts its weights between the royalty trusts and the oil-sands producers depending on current crude oil prices…and this allows investors to grab dividends during rough times while still looking for growth when oil is soaring.

The fund pays out a current yield of around 3% -- and it has returned 14.9% YTD. In addition to the fund’s unique “weighting” strategy, the fact that the fund’s focus is on Canadian investments provides investors with further insurance in the event of difficulties for U.S.-based companies.


Trade #4: IQ Global Oil Small-Cap ETF (IOIL) – closed 5/17 at $18.80



As a quick glance at the chart will tell you…this is a brand-new ETF.

Launched in early May, the IQ Global Oil Small Cap ETF is a small-cap oil ETF…which means you get the chance to take advantage of a fast-growing – but often overlooked – corner of the global energy market.

By investing in small caps – via this new ETF – you give yourself the benefits associated with those smaller companies that are often ignored by analysts at large institutional firms. And when some of these small-caps take off…they have the potential to send a fund soaring!

In addition, because this is a global small-cap play, you’re not just getting the benefit of overlooked companies…you’re also giving yourself the power of the growth that’s associated with emerging markets.

In short, this ETF gives us everything we’re looking for as investors cashing in on the New Energy Revolution: explosive profit potential – before the Big Boys join the party – from emerging markets.


Trade #5: Market Vectors Coal ETF (KOL) – closed 5/17 at $46.69



International coal prices have been soaring – up more than 30% over the last year – and that’s due to strong demand in places like China and India, where there are huge coal shortages.

While it’s true that a lot of coal-fired plants are being retired in the U.S., the reality is that coal is an extremely cheap source of fuel for the rest of the world – and globally, coal usage is up dramatically.

China’s government is warning of widespread power shortages as we head into summer, and that means their demand for coal will continue to soar. China is the world's largest consumer, gobbling up nearly half of the world's coal consumption…and coal accounts for more than 70% of the nation’s energy.

This fund -- Market Vectors Coal ETF – is perfectly positioned to benefit from the continued heavy demand for coal across the world. It’s up nearly 60% over the last twelve months…and it’s poised to run much, much higher in the months ahead.