iShares S&P/TSX Capped Energy Index ETF…

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

26.70

-0.82 (2.98%)

as of Jul 27, 2026, 7:59:57 pm Market Open.

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Investor Insights

Jul 26, 2026, 12:00 am

This summary was created by AI, based on 9 opinions in the last 12 months.

The iShares S&P/TSX Capped Energy Index ETF (XEG) has emerged as a prominent choice for investors seeking Canadian oil exposure, particularly in tax-advantaged accounts like RRIFs. Experts highlight that XEG offers straightforward growth potential compared to ENCC, which employs a covered call strategy, providing income but capping upside. Diversification is a critical factor in the recommendations, with advocates suggesting that XEG can serve as a temporary holding while conducting further due diligence on specific energy stocks. Recent performance suggests a bullish outlook for energy, with XEG breaking out to new highs, driven by a favorable backdrop for oil and gas investments, despite potential market volatility due to geopolitical tensions. Many believe that, while the Canadian energy sector faces structural challenges, the long-term outlook for energy prices remains optimistic, potentially rewarding those who invest thoughtfully in XEG.

Consensus

Bullish

Valuation

Fair Value

Similar

ZEO

BUY

Good resource sector ETF?

It's such a broad sector, from energy to oil-related to materials to gold or uranium.

The most popular one related to the energy index is probably XEG. Exposure to most of the larger Canadian energy producers like CNQ, SU, etc.

What's catching his eye more right now is CGL, the gold bullion ETF. Recently broken out. He can see a scenario where gold moves higher to $2600 or even $3000 over the next year and a bit. Avoids the issues that come with mining in certain jurisdictions. Good way to play exposure to gold and to the commodity market in general.

HOLD

Total return over 3 years is 157%. Total return should be your focus, unless you really need the income. There's value in energy going forward, but no near-term catalyst for it to move higher anytime soon.

BUY ON WEAKNESS

Best way to get exposure to Canadian energy.
Provides dividends.
Excellent returns.

SELL

Big runup, and then a sideways consolidation. Easy money's been made in energy. Oil likely to move lower and be in a sideways, choppy trading range. For the bulk of this year, and into 2024, energy stocks will go sideways and be relative underperformers. For example, if market's up 10%, energy might be up 8-9%. So they'll be broadly in line with market, but will underperform. They're late-cycle plays, and all his works shows that we're starting a new cycle.

BUY

There's underproduction of oil and supply constraints. Also, US oil reserves were drained before their elections and now needs to be filled whenever oil dips to $70. So, oil has a floor and there remains demand. A good sector to own, especially if China opens next spring. XEG holds Canadian oil stocks, and is market-cap weighted, including CNQ, Suncor and Cenovus among its top holding. ZEO is an equal-weight, so offers a little more diversity. And HXE is the cap-weighted ETF like XEG, but it doesn't pay a dividend. So this is good outside an RRSP. For midcap oil, look at NNRG, but charges a higher MER. It depends on your tax preference and the contents of each ETF.

PAST TOP PICK

(A Top Pick Mar 21/22, Up 8%) Energy sector is not favourable at this time. Longer term, it will do well. Right now, wait for a better opportunity, perhaps late, late December/early January or in February.

BUY ON WEAKNESS

Long term is negative on outlook on for traditional energy (~20 years). Short term, is buying energy names (~5 years). Doesn't think oil will go to $120. Once conflict in Ukraine stops, oil prices will fall.

DON'T BUY

Energy ETF Commodities are sensitive to the cycle: warning. Suggests XEG or HXE, both market-cap weighted in oil producers, but they are dominated by Suncor and CNQ (over 50% of these ETFs). For more diversification, look at equal-weighted ZEO-T. But he prefers HUC-T because it gives you commodity--and not commodity stock--exposure. For all of these, be very, very careful--there could be severe drawdowns in energy if the economy falters in the next 6-12 months.

Wealthica Track your Stocks in your Watch List

TOP PICK

This is for exposure to the Canadian energy sector which is in a better spot than the U.S. sector. Energy has done really well and has more to go, being in a strong seasonal period. April is a very good month for energy.

SELL ON STRENGTH

The way to trade energy is XEG which is market cap weighted. ZEO is equal weights. He has been selling into strength right now though.

PAST TOP PICK

(A Top Pick Feb 11/20, Up 57%) He had it as a tactical play, which he holds for 3-6 months, not a core position. Once he makes his 20-25%, he's out and doesn't pay attention to what happens after that.

SELL ON STRENGTH

Not early in this play. Oil prices are getting back to the $100 area, but energy stocks won't get back to levels at the time due to the ESG factor. Because of the under-investment in traditional energy stocks, prices may stay elevated. However, it will probably see lower highs per rally. Trimming exposure to energy. Would not add new money and would trim.

COMMENT

Average adviser clients would have 5-20% allocation in energy. It is cyclical and volatile. It could go down. Wouldn't recommend holding more than 20% weighting in the sector. Current energy weighting on the TSX is 12%.

COMMENT

Okay if you are interested in dividends. If you are looking for capital appreciations, there are better choices for this. 2.8% dividend.

BUY

The world is moving away from oil, but in the short term, there could be increased demand to supply. If oil is $60-$80, oil stocks are pretty cheap. Likes the sector to trade, but not for the long term. The biggest investors in green energy are these traditional energy companies.

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