Top ASX ETFs to Watch as Oil Prices Surge Above US$100

The crude oil process has crossed the US$100 mark and now is over US$107 after Saudi Arabia closed its east west pipeline following a drone attack following the tension in Yemen. The increase in oil prices was mainly occurred due to the Middle East conflict. Tight inventories and limited spare capacity have amplified the effect of these disruptions, leaving the global market unusually vulnerable to any further supply shocks.

Global Energy Companies Currency Hedged ETF (ASX: FUEL)

An ETF that aims to track the performance of an index that comprises the largest global energy companies hedged into Australian dollars.

FUEL invests in a portfolio of the world’s largest energy companies, including Chevron, ExxonMobil, and Royal Dutch Shell, in one ASX trade. It provides an exposure to top energy companies that are larger, more geographically diversified, and more vertically integrated than Australian-listed energy companies.

Global Energy Companies Currency Hedged ETF has reported a strong performance with a YTD return of 39.20% and a 1 year return of 41.80%. It has delivered a 5 year return of 19.97%. FUEL has a 12 month distribution yield of 4.1% and does distribution semi annually.

It is the most sector allocated in integrated oil and gas, with 48.7%, followed by oil & gas storage & transportation with 17.1%, and others covering the remaining allocation. Country wise, they have allocated 53.4% in the United States, 15.2% in Canada, 8.1% in the Netherlands, and 23.3% and others comprise 23% of the allocation.

The ETF has a management fee of 0.47% per annum and expenses estimated to be 0.10% per annum.

VanEck Australian Resources ETF (ASX: MVR)

An Australian based ETF that invests across a range of resource companies listed in ASX. It currently has 35 holdings, with a dividend yield of 2.70%.

MVR benefits from Australia’s trade with both growing nations like China and India, as well as more developed countries such as the USA and Japan. They have taken a tactical exposure in one of the pillars of Australia's economy and its major exports.

As of now the ETF has generated a one month return of 12.06%, 1 year return of 37.12%, 5 year return of 15.09%, and a 10 year return of 15.07%. Since its inception it has generated a return of 11.2%.

VanEck has the maximum sub industry weightings in diversified metals & mining with 31.9%, gold with 26.5%, and oil & gas exploration & production with 13.8%. The top ten fund holdings include BHP Group Ltd with 8.1% weightage, Woodside Energy Group Ltd with 7.75%, Northern Star Resources Ltd with 6.4%, and so on.

MVR has a net asset of A$852.9M and a management fee of 0.35 per annum and distributes dividend semi annually.

Conclusion

These two are the top ASX based ETFs to invest in considering the current scenario of supply chain and distribution issues in crude oil, resulting in the elevated crude oil prices.

(Source: Company Announcements)