iShares S&P/TSX Capped Energy Index ETF
XEG.TO (TSX)
The iShares S&P/TSX Capped Energy Index ETF (XEG) stands out as a top performer in the Canadian energy sector, boasting a 7.85% return over the past year and an impressive 193.59% over five years. With a dividend yield of 3.62%, this fund is an attractive option for investors looking for exposure to energy while benefiting from consistent income. Currently rated as a buy, XEG's concentrated strategy may offer substantial gains during market upswings, although it also carries risks during downturns.
Pros:
- Top performer in the Canadian energy sector
- Strong one-year return
Cons:
- High risk due to sector concentration
- Potential for significant downside in downturns
The iShares S&P/TSX Capped Energy Index ETF (XEG.TO) may be suitable for investors seeking exposure to the Canadian energy sector with a focus on potential growth and dividend income, particularly those comfortable with the inherent volatility of concentrated sector investments. While its strong historical returns and attractive yield are notable, potential investors should carefully consider their risk tolerance and market outlook before proceeding.