2 Best Oil ETFs in Canada (June 2026)
The best oil ETFs in Canada include XEG.TO (~0.61% MER) for equity exposure and HOU.TO (~1.15% MER) for leveraged oil price tracking. These ETFs provide ways to benefit from rising oil prices but are highly volatile, making them better suited for short-term or tactical positions rather than long-term core investments.
Oil ETFs are designed for Canadian investors looking to gain direct exposure to crude oil prices and oil-producing companies. ETFs like XEG.TO and HOU.TO offer different ways to invest in the oil sector, either through equities or by tracking oil futures.
The key advantage of oil ETFs is their ability to benefit from rising oil prices and global energy demand. However, they are highly volatile and influenced by commodity cycles, geopolitical events, and supply-demand imbalances.
In this guide, we break down the best oil ETFs in Canada, comparing strategies, fees, and risk so you can decide how they fit into your TFSA, RRSP, or tactical investment strategy.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top XEG.TO iShares S&P/TSX Capped Energy Index ETF | — | $2.3B | 2.80% | +27.21% | +55.81% |
HOU.TO BetaPro Crude Oil Daily Bull ETF | — | $123M | — | +77.96% | +72.93% |
What Is an ETF?
An oil ETF in Canada is an exchange-traded fund that provides exposure to oil through either energy company stocks or direct commodity tracking using futures contracts. These ETFs allow investors to participate in oil price movements without buying individual stocks or commodities.
For example, XEG.TO (~0.61% MER) invests in Canadian oil and gas companies, offering indirect exposure to oil prices through equities. HOU.TO (~1.15% MER) is a leveraged ETF that tracks daily oil price movements using futures, making it suitable for short-term trading. HUC.TO (~0.95% MER) provides unleveraged exposure to crude oil futures, while ZEO.TO (~0.61% MER) offers equal-weight exposure to Canadian energy stocks.
Oil ETFs are typically used in TFSAs and non-registered accounts for tactical positioning. Investors should understand that commodity-based ETFs can behave very differently from equity ETFs and carry higher volatility and risk.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
iShares S&P/TSX Capped Energy Index ETF
$24.87
+27.21% YTD
Returns
YTD
+27.21%
1Y
+55.81%
3Y
+26.83%
5Y
+28.03%
BetaPro Crude Oil Daily Bull ETF
$15.50
+77.96% YTD
Returns
YTD
+77.96%
1Y
+72.93%
3Y
+24.55%
5Y
+11.26%
Pros & Cons
Pros
- Direct or indirect exposure to oil price movements
- Strong upside potential during rising oil markets
- Useful for short-term trading or tactical allocation
- Access to energy sector leaders through equity-based ETFs
Cons
- Extremely volatile and dependent on oil price fluctuations
- Leveraged ETFs like HOU.TO amplify both gains and losses
- Commodity ETFs can suffer from tracking errors and roll costs
- Not suitable as a long-term core holding for most investors
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best oil ETF in Canada?
XEG.TO is one of the most popular oil ETFs in Canada because it provides exposure to major oil and gas companies. For direct oil price exposure, HOU.TO offers leveraged tracking, but it carries significantly higher risk and is better suited for short-term trading.
Are oil ETFs risky?
Yes, oil ETFs are highly volatile because they depend on crude oil prices, which are influenced by global supply, demand, and geopolitical events. Leveraged oil ETFs carry even higher risk due to amplified price movements.
Should I invest in oil ETFs long term?
Oil ETFs are generally not ideal for long-term investing due to their cyclical nature and volatility. Most investors use them as short-term or tactical positions rather than core portfolio holdings.