Author Topic: Is there a Vanguard Oil/Gas fund?  (Read 6128 times)

TheAnonOne

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Is there a Vanguard Oil/Gas fund?
« on: January 14, 2016, 11:41:13 AM »
I was contemplating putting a bit of my deposits into some of the energies market. If Vanguard has a fund that generally followed the crash in oil prices, I would probably just be lazy and buy that one...

Any insights appreciated!


PS. This would be a small % of invested assets.

dandarc

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #1 on: January 14, 2016, 11:42:20 AM »
VENAX?

TheAnonOne

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #2 on: January 14, 2016, 11:48:03 AM »
VENAX?

I was looking at that but the $100,000 minimum is a bit much.

I also saw the following pair....
Vanguard Energy Fund Investor Shares (VGENX) (or Admiral Shares (VGELX))

I just don't see how energy could remain low for any extended period of time.

dandarc

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #3 on: January 14, 2016, 11:52:16 AM »
The graph on either of those looks pretty similar to the one with the ridiculous buy-in.

Of course, they're actively managed, so the ER's are higher.

dandarc

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #4 on: January 14, 2016, 11:53:18 AM »
And you could buy the ETF version of VENAX - VDE.

CmFtns

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #5 on: January 14, 2016, 11:58:49 AM »
VENAX?

I was looking at that but the $100,000 minimum is a bit much.

I also saw the following pair....
Vanguard Energy Fund Investor Shares (VGENX) (or Admiral Shares (VGELX))

I just don't see how energy could remain low for any extended period of time.

Looks like VENAX is available as an ETF
https://personal.vanguard.com/us/funds/snapshot?FundId=0951&FundIntExt=INT

I wonder to myself though if these stocks really do track the price of crude oil because if oil prices drop super low then these companies could have long term damage due to large losses in profit. Oil prices going back up will help the companies regain profits but they will lag behind crude prices if they are even in business anymore to refine/sell oil.
« Last Edit: January 14, 2016, 12:02:21 PM by comfyfutons »

tj

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #6 on: January 14, 2016, 12:15:25 PM »
VGENX is ran by both Wellington and Vanguad, I wouldn't have a problem using this fund if I wanted oil exposure, But I think I'd rather be more diversified among sectors with a large value fund in general, such as VEIPX or Vanguard Value Index.

MustacheAndaHalf

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #7 on: January 14, 2016, 12:18:24 PM »
I just don't see how energy could remain low for any extended period of time.
OPEC.

Keep in mind oil is not a free market.  A cartel called OPEC sets production, which determines price.  OPEC is waging a price war against non-OPEC producers, and claim they can continue for years.

TheAnonOne

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #8 on: January 14, 2016, 12:40:44 PM »
I just don't see how energy could remain low for any extended period of time.
OPEC.

Keep in mind oil is not a free market.  A cartel called OPEC sets production, which determines price.  OPEC is waging a price war against non-OPEC producers, and claim they can continue for years.

They could probably continue for years, but more expensive methods of extracting oil are mostly stopped by now, and there are enough people against low oil prices that this will probably be a momentary blip on a graph in 2-3 years...

*I hope prices stay low for my road trip in June though!*

JZinCO

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #9 on: January 14, 2016, 01:00:02 PM »
I wonder to myself though if these stocks really do track the price of crude oil because if oil prices drop super low then these companies could have long term damage due to large losses in profit. Oil prices going back up will help the companies regain profits but they will lag behind crude prices if they are even in business anymore to refine/sell oil.
You're totally right. Drilling (here I use it as a catch all from exploration to all services that happen to make a rig punch a hole in the ground) companies have the most sensitivity <- When a barrel is trading low, well starts are low because all of that front-end drilling work is subsidized by the wells on-line which are selling crude to refiners. When barrel prices recover, then there is a lag time because planning can now resume, and then new well  starts can occur. Time is eaten up with geologists, planners, regulatory agencies, etc before the new rigs can get on site and drill; the the drilling has to happen; then the pipeline or storage units have to happen. Huge lag.
I've had a few conversations with family members in the drilling services industry about how ridiculous it is that despite that drilling demands a long term planning process, it is tied to the short-term planning cycles of the downstream value adders. As a result, the market will not optimize drilling.
Anyway a long winded way to say that everyone in the supply chain is affected but the most affected are the ones who are way at the front of the lifecycle.
http://www.investopedia.com/articles/active-trading/021315/companies-affected-most-low-oil-prices.asp

edit: They're hurt in more ways than one too. Coming in with a dog in the fight HAL laid off 1/3 of their workforce (combo of recession and after the white house's moratorium on offshore drilling) including two family members and DO is about to lay off another.
TheAnonOne is right. Making a play in oil (commodity or companies) is super tricky because the market isn't the only actor (ISIS, OPEC, environmental agencies, etc).
« Last Edit: January 14, 2016, 01:17:35 PM by JZinCO »

MustacheAndaHalf

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #10 on: January 14, 2016, 06:49:23 PM »
I just don't see how energy could remain low for any extended period of time.
OPEC.

Keep in mind oil is not a free market.  A cartel called OPEC sets production, which determines price.  OPEC is waging a price war against non-OPEC producers, and claim they can continue for years.
They could probably continue for years, but more expensive methods of extracting oil are mostly stopped by now, and there are enough people against low oil prices that this will probably be a momentary blip on a graph in 2-3 years...
Why would "enough people against low oil prices" matter to the Organization of the Petroleum Exporting Countries (OPEC)?  If anything, watching competitors suffer and go out of business is their goal, not something that would change their mind.

Here's what it costs various countries to produce a barrel of oil:
http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL
It shows Saudi Arabia at $9.90/barrel, and U.S. at $36.20/barrel.
« Last Edit: January 14, 2016, 06:56:48 PM by MustacheAndaHalf »

CmFtns

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #11 on: January 15, 2016, 07:15:11 AM »
I wonder to myself though if these stocks really do track the price of crude oil because if oil prices drop super low then these companies could have long term damage due to large losses in profit. Oil prices going back up will help the companies regain profits but they will lag behind crude prices if they are even in business anymore to refine/sell oil.
You're totally right. Drilling (here I use it as a catch all from exploration to all services that happen to make a rig punch a hole in the ground) companies have the most sensitivity <- When a barrel is trading low, well starts are low because all of that front-end drilling work is subsidized by the wells on-line which are selling crude to refiners. When barrel prices recover, then there is a lag time because planning can now resume, and then new well  starts can occur. Time is eaten up with geologists, planners, regulatory agencies, etc before the new rigs can get on site and drill; the the drilling has to happen; then the pipeline or storage units have to happen. Huge lag.
I've had a few conversations with family members in the drilling services industry about how ridiculous it is that despite that drilling demands a long term planning process, it is tied to the short-term planning cycles of the downstream value adders. As a result, the market will not optimize drilling.
Anyway a long winded way to say that everyone in the supply chain is affected but the most affected are the ones who are way at the front of the lifecycle.
http://www.investopedia.com/articles/active-trading/021315/companies-affected-most-low-oil-prices.asp

edit: They're hurt in more ways than one too. Coming in with a dog in the fight HAL laid off 1/3 of their workforce (combo of recession and after the white house's moratorium on offshore drilling) including two family members and DO is about to lay off another.
TheAnonOne is right. Making a play in oil (commodity or companies) is super tricky because the market isn't the only actor (ISIS, OPEC, environmental agencies, etc).

Yea, and I guess my point, considering what you said, is that the stocks of the energy companies included in VENAX don't track the price of a barrel of crude oil well so that's not what the OP is looking for. I believe he wants to buy a stock that he can sell once oil prices go back up even if all the US energy companies go out of business.
« Last Edit: January 15, 2016, 07:17:13 AM by comfyfutons »

pbkmaine

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Is there a Vanguard Oil/Gas fund?
« Reply #12 on: January 15, 2016, 07:16:35 AM »

nobodyspecial

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #13 on: January 16, 2016, 05:26:16 PM »
Why would "enough people against low oil prices" matter to the Organization of the Petroleum Exporting Countries (OPEC)?  If anything, watching competitors suffer and go out of business is their goal, not something that would change their mind.
Because many of the companies suffering from low oil prices make big contributions to politicians in countries who have aircraft carriers and a historically robust attitude to the leaders of middle eastern countries who are bad for business.


« Last Edit: January 16, 2016, 05:28:11 PM by nobodyspecial »

bittheory

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #14 on: January 22, 2016, 03:31:30 PM »
I'm seriously considering dropping some cash into VDE, Vanguard's Energy Sector ETF.

Can someone talk me into not doing so. And if so, why?


GrOW

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #15 on: January 22, 2016, 04:21:28 PM »
I'm seriously considering dropping some cash into VDE, Vanguard's Energy Sector ETF.

Can someone talk me into not doing so. And if so, why?

That is one concentrates etf. Top stock makes up over 25% and top 5 over 50%. All US so no BP or similar.

Ok none of that is a reason to say no but does that mean a reason to say yes? Not for me.

matthewpsharp

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #16 on: January 23, 2016, 03:09:43 PM »
I'm seriously considering dropping some cash into VDE, Vanguard's Energy Sector ETF.

Can someone talk me into not doing so. And if so, why?

You might spend a decade with no or nominal returns, while other sectors have increases.  A friend of mine, who works in white-collar oil and gas, summed this up well on why not to buy commodities/commodity sector stocks;

"No I straight up avoid commodities, no matter the cost. To me, theyíre a non-productive asset with no inherent growth. Thereís a lot of thought out there right now that the commodity supercycle is permanently over. I would be hesitant to say that it canít stay this low forever, as there is a fundamental shift in the market that has led to the collapse. Itís not just speculation. You could make 15-20% over the next few years, but that probably could have been accomplished almost anywhere without the high degree of risk or asset concentration.
 
As a parallel, coal never did recover and probably never will. Same with natural gas.
 
That being said, this is all just my opinion and I am wrong more often than right.! Might be exciting to throw a bone at it."





acanthurus

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Re: Is there a Vanguard Oil/Gas fund?
« Reply #17 on: January 23, 2016, 10:09:01 PM »
I am upstream oil and gas technology development (MWD). If you want to invest, stick with the large, well run companies. XOM, COP, and SLB would be my picks. VDE isn't a bad choice either but you get some dregs in there too.I mean real gems like WFT and CHK. This is one sector that is an absolute stock picker's market.