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Some Star Energy Stocks Are Found in This ETF

With higher growth sectors and glitzier commodities soaring, the energy sector isn’t getting much attention this year beyond the standard focus on oil market gyrations.That’s not to say energy stocks have been “bad” per se, but as highlighted by the S&P Energy Select Sector Index, the group is trailing the broader market. It’s possible the sector could shed its laggard status before the end of this year and be a redemption story in 2026, signaling opportunity with ETFs such as the ALPS CoreCommodity Natural Resources ETF (CCNR ). CCNR could be a prudent choice for skittish investors looking to position for a potential energy rebound because the ETF fully dedicated to the energy sector. Rather, that group accounts for 34.49% of the ETF’s roster, making it the fund’s second-largest sector exposure behind materials. That is to say the ALPS ETF is a somewhat diverse play on commodities-linked equities.CCNR Energy Lineup Is AlluringIt’s not just CCNR’s exposure to the energy sector that’s meaningful. More important than that is the fact that the ETF is home to a slew of high-quality oil and gas names that could be leaders should the sector rebound in earnest. One example is Devon Energy (DVN). Devon “has a meaningful presence in four of the top five US shale basins by lowest breakeven costs: the Williston, the Eagle Ford, and the Anadarko basins,” noted Morningstar’s Josh Aguilar. “Exposure to high-quality assets with a near 17-year remaining inventory life, coupled with operational improvements from initiatives like longer laterals, should allow Devon to enjoy modest production growth. Importantly, we expect production gains will come at increasingly attractive drilling and completion costs.” Occidental Petroleum (OXY), a smaller CCNR component, is another example of an energy stock that could see better days in the months ahead. Though criticized for selling its chemicals business to Berkshire Hathaway at a bad time and at a low price, Occidental is at least generating some proceeds with which to fortify its balance sheet. Additionally, the company’s midstream unit has a strong footprint in the fast-growing carbon sequestration industry. That trait could be additive in an Occidental rebound story – one that could contribute to upside for CCNR. “The midstream segment also includes Oxy Low Carbon Ventures, which partners with third parties to implement carbon capture, storage, and utilization projects. This activity differentiates Occidental from most peers, which merely focus on curtailing their emissions. Oxy’s experience sequestering carbon dioxide for enhanced oil recovery potentially enables it to go further,” added Aguilar. For more news, information, and analysis, visit the ETF Building Blocks Content Hub.

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