Investing in safe-haven stocks has been a popular trend in recent months, as investors appear to be more concerned about economic uncertainty these days. And one place they've been turning to is to energy stocks, which not only generate consistently strong earnings but they also usually pay dividends.
One energy-focused exchange-traded fund (ETF) that's been doing particularly well of late is the iShares S&P/TSX Capped Energy Index ETF (TSX:XEG). In the past six months, it has risen by 26%. And year to date, it's also up by around 14% -- far higher than the S&P/TSX Composite Index's gains of around just 2%.
The fund focuses specifically on stocks in the Canadian energy sector and is anchored by Suncor Energy and Canadian Natural Resources, which combined, account for more than half of its portfolio. As the market continually moves to energy stocks and safer investments, this ETF can still rally higher as the year goes on. Its expense ratio of 0.6% isn't terribly low but it can be justifiable for investors who want exposure to energy stocks.
An added bonus with the ETF is that it also offers a fairly high dividend that yields 3.6%. Whether you're looking for some stability, dividends, or just want to diversify into energy stocks, this ETF can be an excellent investment to consider adding to your portfolio today and hanging on for years. Even with some terrific gains over the past six months, there's still potential for it to rise much higher in value in the future.
