Best Energy ETFs in Canada (2026): XEG, ZEO, HXE and Clean Energy Funds Compared

An energy ETF holds a basket of energy companies in one trade. The table below splits the Canadian-listed ones into oil and gas funds and clean energy funds. XEG, ZEO and OILY hold Canadian energy companies (Evolve lists producers, integrated companies, pipeline operators and oilfield services for OILY’s index); the clean energy funds hold renewable energy and power companies listed in many countries. Inside the oil and gas group, the funds differ in how they weight their companies, whether they also sell call options and, for a few, where their companies are listed. This page compares them from each issuer’s own figures and sets out those differences without picking a fund.

What do Canadian energy ETFs hold?

iShares describes XEG as targeted exposure to companies in Canada’s energy sector, and BMO describes ZEO as exposure to Canadian oil and gas stocks. Evolve, describing the index behind its OILY fund, names the sector’s main parts: exploration and production, integrated oil companies, midstream pipeline operators and oilfield services.

Capped or equal weight. XEG and HXE track the S&P/TSX Capped Energy Index, which Global X describes as the energy stocks in the S&P/TSX Composite Index, with no single company allowed above 25% of the index. An equal-weight index gives each company the same weight instead of one set by its market value, and BMO says ZEO does this to lessen the risk tied to any one stock. Global X’s NRGY and ENCC also follow an equal-weight index of large Canadian oil and gas companies. CI’s NXF holds at least the 15 largest energy companies by market capitalization on an equal-weight basis, giving North American energy exposure hedged to the Canadian dollar.

Covered calls and leverage. ENCC, ZWEN, HPF and OILY also sell call options on what they hold (OILY on up to 33% of its portfolio), which BMO and Harvest say is to generate income, and Global X notes that this can limit the upside. OILY also uses leverage, up to 1.25 times, which Evolve says can amplify both gains and losses. Covered-call ETFs explains what option writing changes in what a fund pays and gives up.

Corporate class. HXE is a corporate class ETF, and Global X describes it as meant for investors who aren’t looking for regular distributions. How ETFs are taxed explains what that structure means at tax time.

What moves the prices. Writing about OILY’s holdings, Evolve says producers tend to earn more cash when oil and natural gas prices rise, and less when they fall. Pipeline and storage companies, it adds, depend less directly on commodity prices because they are paid fees on the volumes they move. NRGY’s holdings list, for example, includes TC Energy.

Funds that hold commodity futures rather than companies are a different product. CI’s CCOM, for one, holds futures across agriculture, energy and metals; it is on our gold and commodity ETFs page. For energy mutual funds, mutual funds in Canada explains how that form is bought and priced.

How much energy you may already hold. Vanguard points out that Canada’s stock market leans heavily toward energy, financials and materials. In XIC, iShares’ fund holding the whole Canadian market, energy companies made up 16.45% on October 7, 2026. An energy fund on top of a broad Canadian fund adds to that share; what sector ETFs add covers the trade-off.

The main energy ETFs compared

The table lists Canadian-listed funds from iShares, BMO, Global X, Harvest, CI and Evolve that hold energy stocks and publish an MER, in two groups (oil and gas, then clean energy), largest first by the net assets each issuer reports. US-listed funds are left out: XLE, for example, tracks the energy sector of the S&P 500 and trades on NYSE Arca. US-listed vs Canadian-listed ETFs compares the two kinds of listing.

Issuer-published figures. Holdings counts are each as of the date shown under them. MER as of BMO: the latest audited year (fact sheet of September 30, 2026) or the latest audited year (ETF Facts of January 23, 2026); CI: June 30, 2026; Evolve: June 30, 2026; Global X: June 30, 2026; Harvest: June 30, 2026; iShares: June 30, 2026 (each issuer's latest reported MER). Each ticker links to the issuer's page, which has the current price, holdings, distributions and performance.

The hedged column shows what each issuer says about currency hedging; “Not stated” means its documents don’t say. The table marks the funds whose documents describe a call-writing program. There are no return or yield columns, because how an ETF did in the past can’t tell you how it will do next.

How do the funds differ?

Weighting. XEG and HXE follow the capped index; ZEO, NRGY and ENCC follow equal-weight indexes, as the first section explains.

Holdings. XEG holds 27 companies, ZEO 11 and OILY 9, against 217 in the broad XIC on October 7, 2026 (the other dates are in the note under the table). ZWEN holds 40, and BMO says its holdings may include clean energy companies.

Fees. Among XEG, ZEO, NRGY and HXE, MERs run from 0.27% for HXE to 0.61% for XEG, with NRGY at 0.47% and ZEO at 0.60%. Global X says NRGY’s MER includes a fee rebate or waiver and would have been higher without it. The call-writing funds’ MERs run from 0.72% for ZWEN to 0.98% for HPF. The MER is paid whether the fund gains or loses.

Distributions. XEG and ZEO pay quarterly, while NRGY and the call-writing funds pay monthly. Global X says HXE suits investors not looking for regular distributions.

Currency. HPF holds large energy companies from around the world and NXF holds North American-listed ones; Harvest and CI both hedge these units to the Canadian dollar, while CI also lists NXF.B, which is not hedged. Unhedged units carry currency risk, the chance of losing money when exchange rates move; hedged vs unhedged ETFs explains the trade-off.

What do clean energy ETFs hold, and how are they different?

Clean energy funds hold a different set of companies from the oil and gas funds. BMO’s ZCLN tracks the S&P Global Clean Energy Index, which BMO says covers companies in developed and emerging markets working in clean energy businesses, including electric utilities and independent power producers. Harvest’s HCLN holds the 40 largest companies classed as renewable energy or renewable power generation on North American, European and developed Asian exchanges, in equal amounts. Its holdings list includes companies Harvest labels as solar and as wind equipment and services makers.

ZCLN holds 100 companies at an MER of 0.39%, and HCLN 40 at 0.69%. HCLN is unhedged, so its value in Canadian dollars also moves with exchange rates.

Because ZCLN’s index counts electric utilities and power producers as clean energy businesses, readers comparing it with utility funds can see those on utility and infrastructure ETFs. A clean energy fund chooses companies by the business they are in. An ESG fund works differently: iShares’ XESG, for example, leans toward companies with favourable ESG characteristics as MSCI judges them; those funds are compared on ESG ETFs.

What don’t energy ETFs do?

• They hold one sector. The oil and gas funds hold far fewer companies than a broad fund, and BMO gives ZEO a High risk rating. See what sector ETFs add.
• Stocks can fall with the whole market, whatever happens to oil prices.
• Call writing and leverage cut both ways. Covered calls can limit the upside, and Evolve says leverage increases risk.
• Distributions have tax effects. ZWEN and OILY say their distributions can include return of capital. A return of capital is the part of a fund's distribution that is more than its earnings; it isn't taxed in the year you receive it but reduces the adjusted cost base (ACB) of your units, which generally means a larger capital gain or smaller capital loss when you sell, and if it takes the ACB below zero the negative amount is a capital gain for that year. A mutual fund trust sends a T3 slip, and selling units usually gives a capital gain; see how ETFs are taxed.
• They aren’t covered by deposit insurance and can lose money.

Where to go next

• Sector and thematic ETFs
• Utility and infrastructure ETFs
• Covered-call ETFs
• Canadian oil stocks
• Where to buy ETFs: compare brokers
• All ETF guides