The ASX-traded BetaShares Global Energy ETF (FUEL) provides exposure to a diversified portfolio of the world’s largest energy companies, primarily in oil and gas, obviously a great place to have been invested during the war in the Middle East. The question is what now, as the Strait of Hormuz reopens and the ETF has corrected well over 10%.
It’s important to remember this is a locally traded global oil and gas ETF, with its largest 3 holdings today being Exxon (8%), Chevron (7.9%), and Shell (7.8%), i.e. it doesn’t hold ASX names, hence investors forgo franking credits from the likes of Woodside, which we know is a major motivation for many MM members.
Despite record investment in energy transition, fossil fuels continue to dominate global energy consumption, leaving traditional energy well placed to benefit from structurally rising AI demand; however, after a more than 70% rally from its 2025 low, we see limited near-term upside unless geopolitical tensions in the Middle East escalate again. However, the long-term trend is bullish, hence we aren’t expecting too much more on the downside.
- We are looking for the FUEL ETF to find support around current levels, though with Oil prices now looking more evenly balanced, we don’t have an easily identifiable positive catalyst.
MM is neutral towards the FUEL ETF around $8.00
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