I'm thinking of adding an energy index ETF to my AA model in the coming year. To date I have only broad indices with the exception of one sectoral bet on US healthcare. I'm thinking of adding a second sectoral bet using a small amount of my equity allocation.
The question is - which index?
Vanguard, always my first choice when other things are equal, has an energy index ETF that tracks the MSCI US Investable Market Energy Index. THis is certainly a decent choice and has obviously done quite well for the past several years.
But I don't love the fact that its US based. Sure that picks up most of the majors, but theres something to be said for not excluding the big-name non US players, e.g. Shell, Total, BP, etc. I think that is especially true since there are a number of countries with lots of energy resources which prefer to contract with non-US companies.
So the other option I'm looking at is IXC, the Barclay's ETF that tracks the S&P Global Energy Sector Index fund.
Of course thats a more expensive fund - both because Barclays is generally more expensive than Vanguard, but also because its more expensive to license an S&P index than an MSCI index. It has also marginally underperformed the Vanguard fund historically.
Hence the purpose of this thread. When you folks look into your crystal balls, do you see additional returns generated by the international components compensating for the premium one would pay for the international index?
Alternatively, is there another international energy index fund out there I'm missing that's cheaper than the Barclays offering?
The question is - which index?
Vanguard, always my first choice when other things are equal, has an energy index ETF that tracks the MSCI US Investable Market Energy Index. THis is certainly a decent choice and has obviously done quite well for the past several years.
But I don't love the fact that its US based. Sure that picks up most of the majors, but theres something to be said for not excluding the big-name non US players, e.g. Shell, Total, BP, etc. I think that is especially true since there are a number of countries with lots of energy resources which prefer to contract with non-US companies.
So the other option I'm looking at is IXC, the Barclay's ETF that tracks the S&P Global Energy Sector Index fund.
Of course thats a more expensive fund - both because Barclays is generally more expensive than Vanguard, but also because its more expensive to license an S&P index than an MSCI index. It has also marginally underperformed the Vanguard fund historically.
Hence the purpose of this thread. When you folks look into your crystal balls, do you see additional returns generated by the international components compensating for the premium one would pay for the international index?
Alternatively, is there another international energy index fund out there I'm missing that's cheaper than the Barclays offering?