iShares Global Energy ETF

IXC

Market cap $2.63B

As Europe confronts a new energy crisis, we explore key measures to strengthen energy security beyond simply lowering energy bills, and the potential implications for business leaders. Europe now relies on a wider range of suppliers, but paradoxically, the new geopolitical situation still leaves Europe vulnerable.

Oil prices may stay elevated through 2027, with Strait of Hormuz risks and infrastructure damage tightening global supply. Check these Energy ETFs to ride the upside.

IXC hits a 52-week high, surging 63.7% from its low, as rising oil prices and Middle East tensions fuel momentum in the energy ETF.

Oil futures touched $100 per barrel this week as Iran's new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz closed, the waterway through which a fifth of the world's oil and liquefied natural gas transits.

I previously issued a 'buy' rating on IXC in mid-2025, citing sector rebound potential and global diversification. I don't believe the market will be over-saturated with crude in 2026, and that suggests to me that prices will move higher, as the current consensus is negative for crude. The fund's global exposure will help it outperform US-only funds in my view, as I feel the USD will weaken and developed markets will offer alpha.

I position iShares Global Energy ETF (IXC) as a hold due to mixed macro signals and elevated sector breadth. IXC's performance is highly sensitive to Brent prices, the US dollar, and 10-year Treasury yields, creating conflicting near-term drivers. The ETF's portfolio is dominated by integrated oil majors and upstream exposure, with a 3.48% SEC yield and 0.40% expense ratio.

I reiterate a "Buy" rating on IXC, citing attractive valuation, global diversification, and a high dividend yield versus the S&P 500. IXC offers exposure to global energy leaders, trades at a modest 14.5x P/E, and boasts a robust 10.2% long-term EPS growth rate. Despite recent underperformance and mixed technicals, IXC's defensive portfolio and favorable calendar trends support a positive outlook.

IXC is a passively managed global energy sector ETF, which I evaluate for its current investment appeal. My previous cautious outlook on IXC has been validated, as the fund has notably underperformed the broader equity market. I see a contrarian opportunity in this fund as expectations are low and crude oil prices are depressed enough that I think the next move will be higher.

I see value in the Energy sector due to its recent underperformance, expected demand rise, and potential trade clarity boosting crude oil prices. Crude oil demand is set to increase, making the current sell-off an opportunity to buy into undervalued Energy ETFs like VDE and IXC. The US's reliance on international trade and a weakening USD could further support crude oil prices, benefiting the Energy sector.

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