Tight supply and surging demand have led to a bull market for oil and gas prices in the second half of 2021. The price of WTI Crude has more than doubled from roughly $35 U.S. in late October 2020 to $83 U.S. at the time of this writing. Meanwhile, gasoline prices have contributed to 18-year high inflation rates in Canada.
Canadian energy stocks have thrived in this environment. Investors who want exposure to the surging oil and gas space should look to the BMO S&P/TSX Equal Weight Oil & Gas ETF (TSX:ZEO). This exchange-traded fund (ETF) is designed to replicate the performance of the Solactive Equal Weight Oil and Gas Index, net of expenses. Shares of this ETF have climbed 59% in 2021 as of mid-afternoon trading on October 29.
This ETF has put together uneven performances in recent years. Its shares plunged 28% in a rough year for the oil and gas space in 2020. It rose 16% in 2019 after dropping 27% and 14%, respectively, in 2018 and 2017.
Investors should recognize the familiar faces that make up this top ETF. Some of the top holdings in the BMO S&P/TSX Equal Weight Oil and Gas ETF include Suncor, which is one of the largest integrated energy companies in Canada. Cenovus Energy and Imperial Oil come in at second and third in terms of weighting, all floating around the 11% mark. Rounding out the top five are Canadian Natural Resources and Tourmaline Oil.
