Should You Own This Canadian Oil and Gas ETF Through 2024?

Canadian consumers have been wrestling with rising inflation since the end of the COVID-19 pandemic. Energy prices have been one of the key drivers. Instead of succumbing to soaring inflation, Canadians should look to push back by scooping up stocks or funds that will thrive in this environment.

Oil prices were on the rise in the early morning of Thursday, August 31. The sector was bolstered by a significant drawdown in United States crude inventories as well as production cuts announced by OPEC+. Meanwhile, a correction in gasoline prices was not enough to stem high Canada inflation in July 2023.

Investors who want to get in on the oil and gas sector should look to the BMO Oil and Gas ETF (TSX:ZEO). This exchange-traded fund (ETF) is designed to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada Oil & Gas Index, net of expenses. Shares of this ETF have jumped 4.6% month-over-month as of close on Wednesday, August 30. The ETF is now up 9% so far in 2023.

Some of the top holdings in this ETF include Arc Resources, Tourmaline Oil, Canadian Natural Resources, Imperial Oil, and finally Keyera Corporation rounds out the top five. The oil and gas space are historically volatile, which is why this ETF is considered high risk. Despite that, I’m looking to snatch up this ETF in the final months of 2023.