iShares S&P/TSX Capped Energy Index ETF (XEG.TO)

iUnits S&P/TSX Capped Energy (XEG-T) or BMO S&P/TSX Oil & Gas (ZE0-T)? Both track very similar industries. This one takes a market cap weighting approach as to how much of each company it holds. Both will be very correlated in their performance. The main difference will be how the big Canadian energy producers are performing. The top 3 or 4 big energy producers in Canada will make up something like 40% of this portfolio. If you thought there was going to be more trouble in the energy market, this one would probably do better, as they can better withstand the storm.

(A Top Pick April 12/16. Up 2.96%.) This is a classic seasonal play. Historically the energy sector in Canada does well from the 3^rd week in January right through until the middle of June. If you own, continue to Hold until around the middle of June.

The period of seasonality for the energy sector in Canada is from around the last week in January right through until the 3^rd week in June. Technically this has formed a nice little base pattern and has broken above its trading range, and looks like it wants to trend higher.

(A Top Pick Feb 27/15. Down 30.5%.) He was stopped out of this in August at about $11.50.

BMO S&P/TSX Oil & Gas (ZEO-T) or iUnits S&P/TSX Capped Energy (XEG-T)? Has always been a fan of the equal weight side of things. If you want torque, the equal weight is probably going to do better than this large weight. They actually track pretty closely.

A safe, cautious way to play a recovery in oil and gas in Canada. Costs in Canadian dollars and revenues in US dollars. You don’t have to pick winners and losers.

This was her biggest Short this year.

An energy play, so the decline in this is the stumble in the price of oil. For it to rebound, you are going to have to see oil back to around $75-$80 a barrel. Doubts if you will see this until the latter half of 2016, if even then. You could be holding this for a long time. You could write covered calls, which is simply selling a call option in which you agree to sell this to somebody else at a certain price. If you are in for a protracted period of time where you don’t think the ETF is going to rebound sharply, then this is not a bad strategy because you are collecting cash flow while waiting.

Sold a bunch of this last fall because of the potential tax hit. He doesn’t see a corporate recovery in oil. There is just so much of it out there because of the deal the US has done with Iran.

(A Top Pick May 28/14. Down 25.76%.) Sold and took a loss. Very cautious on the pricing in oil.

He generally does not like this. He has not recommended energy for 1.5 to 2 years, or perhaps even longer. Oil is still dropping, and that trend may very well continue downwards.

His exposure to energy has been pretty light. He likes individual names, but for diversification purposes, he likes this ETF. Supply conditions are expected to continue to tighten. They have already fallen quite a bit since November. We are not quite there in terms of stabilization. US oil rig count has fallen to levels not seen since June 2011, and that will continue to happen and will continue to constrain supply. If world demand continues to be relatively steady, prices should stabilize and shares will rebound quite nicely.

Like iShares CLO-T and BMO’s ZEO-T, these are good assets that have been beaten up and he sees no reason why not to pick some up here, if your profile is fairly aggressive.

If you believe that oil is on sale, is there an ETF, US or Canadian, that has been beaten down worse than the others, and is this an opportunity? There are a couple that you could look at. iShares S&P/TSX Capped Energy (XEG-T) and BMO S&P/TSX Oil and Gas (ZEO-T). These are very similar, so either one. On the other hand, you could go into the US and pick up SPDR Energy (XLE-N), which has not been slaughtered quite as badly as the Canadian stuff.

If you have a longer term horizon of 3-5 years then it is a no-brainer to overweight the energy sector. ZEO-T would alternatively not contain so much of the majors. The smaller ones of the bigger ones have more impact. This one should outperform the larger cap names. It is equally weighted instead of market cap weighted.