Three Canadian Energy ETFs to Watch After Venezuela’s Regime Change

Trump has effectively triggered a regime change in Venezuela. Under what the administration has framed as a modern application of the Monroe Doctrine, a special operations raid on Caracas resulted in Nicolás Maduro being taken into U.S. custody to await trial. For now, the U.S. has stated it will oversee Venezuela’s transition, placing the country’s vast oil reserves firmly back into the global spotlight.

History suggests Washington excels at shock-and-awe campaigns and toppling regimes, but governing post-conflict states has been a far messier affair. Afghanistan and Iraq remain cautionary tales. Still, markets don’t wait for long-term outcomes. They react immediately, and energy ETFs were no exception.

In the U.S., several energy ETFs jumped, particularly those tied to oil services and infrastructure. The logic was straightforward: rebuilding Venezuela’s energy sector and ramping up production would require drilling expertise, equipment, and capital. Canadian markets, however, told a very different story.

On the TSX, major energy names sold off sharply. Shares of Canadian Natural Resources, Suncor Energy, and Imperial Oil all declined meaningfully on the day. Canada exports the vast majority of its crude to the U.S., and a potential resurgence of Venezuelan supply under U.S. oversight complicates the long-term pricing for Canadian barrels.

That uncertainty is understandable. But stripped of headlines, the fundamentals for Canadian energy producers have not suddenly deteriorated. Balance sheets remain strong, free cash flow is still substantial, and capital discipline has not vanished overnight.

If you were comfortable buying Canadian energy stocks throughout last year, you were effectively handed a larger discount today. With that in mind, here’s a look at three Canadian energy ETFs I’m keeping an eye on heading into 2026.

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

The first option most Canadian investors reach for is XEG, and for good reason. Launched in March 2001, it is the longest-running and largest Canadian energy ETF, with roughly $1.57 billion in assets under management. It tracks the S&P/TSX Capped Energy Index, which currently holds 27 Canadian energy companies and weights them by market capitalization, subject to a 25% cap.

In practice, that cap does not do much to reduce concentration. CNQ and SU remain dominant at 25.22% and 24.10% of the portfolio, respectively. The next largest position, CVE, comes in at a much lower 10.60%. From there, weights drop off quickly.

One quirk investors often notice is the relatively modest weight assigned to IMO, despite its large market capitalization. That comes down to free-float weighting. Because a substantial portion of Imperial Oil’s shares are owned by Exxon Mobil, the index methodology treats a large chunk of its market cap as unavailable to public investors, reducing its weight.

XEG does what it is supposed to do. It gives you direct sensitivity to Canadian oil prices, a respectable 3.63% trailing 12-month yield, and exposure to the largest, most established producers in the country. At roughly 14.5 times earnings, valuation also looks reasonable relative to history.

The drawback is cost. A 0.60% management expense ratio may have been competitive in 2001, but in 2026 it stands out as expensive for a plain-vanilla index ETF. For investors who simply want beta to Canadian energy, it works. It is just not particularly elegant.

Global X Equal Weight Canadian Oil & Gas Index ETF (NRGY)

If the concentration risk in XEG gives you pause, NRGY offers a different approach. It tracks the Mirae Asset Equal Weight Canadian Oil & Gas Index, which equally weights the largest Canadian energy names rather than letting a handful of mega-caps dominate performance.

Instead of being driven almost entirely by CNQ and SU, NRGY spreads exposure across companies such as CVE, WCP, TRP, and TOU, among others. NRGY also includes a meaningful allocation to midstream companies, including pipeline operators such as TRP, KEY, PPL, and ENB.

That changes the ETF’s behavior slightly. Midstream businesses rely more on long-term, fee-based contracts and tend to be less sensitive to day-to-day oil price swings. As a result, NRGY may lag during sharp commodity rallies but can also provide some downside cushioning when oil prices pull back.

There are two features that make NRGY appealing. First, it pays monthly distributions, which some income-focused investors prefer. The yield is comparable to XEG at roughly 3.65%, but the cash flow is smoother. Second, it is cheaper. The stated management fee is 0.40%, and while temporary MER waivers expired at the end of 2025, total costs should still land well below XEG’s over time.

NRGY sacrifices some pure commodity torque in exchange for diversification and lower fees. For investors who want exposure to Canadian energy without betting the farm on just two stocks, I think that trade-off can make sense.

Ninepoint Energy Fund (NNRG)

For investors who want an active approach, NNRG is the most credible option in the Canadian market. The fund is managed by Eric Nuttall, a long-time energy analyst and portfolio manager best known for his frequent appearances discussing energy markets on BNN Bloomberg.

Unlike XEG or NRGY, NNRG is not constrained by an index. The portfolio is built using a mix of top-down sector views and bottom-up company analysis. As a result, it looks very different from passive peers.

Rather than being dominated by large integrated producers or pipeline companies, NNRG tilts heavily toward mid-cap and smaller producers such as PEY, TVE, TPZ, and ATH, where active stock selection can matter more, especially when betting on M&A activity.

The fund also has the flexibility to allocate out of benchmark when opportunities arise, including selective exposure to U.S. energy names. That flexibility is part of the appeal, but it comes at a cost. NNRG charges a 1.50% base management fee, plus a 10% performance fee on returns above the S&P/TSX Capped Energy Index.

That fee structure is unapologetically expensive. Investors are paying for conviction, concentration, and active decision-making. If the manager delivers alpha, the fees may be justified. If not, the cost becomes a significant headwind.

In my opinion, NNRG is not a core holding. It is a high-conviction satellite position for experienced investors who believe active management can still add value in Canadian energy and who are comfortable paying for that belief.