While geopolitical headlines often focus on short-term volatility in the Middle East, the long-term investment case for energy remains centered on security, reliability, and North American export dominance. Stacey Morris, CFA, head of energy research at VettaFi, recently highlighted some long-term views on energy investing beyond the current oil price spike. For advisors, investment opportunities lie in the infrastructure that facilitates global energy trade and the baseload power sources that ensure domestic energy security and stability.
Key Takeaways
- Midstream ETFs like AMLP and ENFR include companies that play an important role in facilitating North American energy exports. They also remain largely insulated from the direct volatility of commodity price fluctuations if oil prices moderate.
- The renewed global focus on energy security and affordability has created a strategic tailwind for nuclear and coal.
- Given energy’s low weighting in the S&P 500, maintaining a permanent energy allocation serves as a critical geopolitical and inflation hedge during periods when broader equity markets may be challenged.
Energy Investment Opportunities & Decoupling from Commodity Volatility
For investors seeking income without the volatility of spot crude prices, the midstream sector remains a compelling allocation. Unlike upstream producers that are sensitive to crude prices, midstream companies operate on a fee-based model. Morris notes that these companies facilitate the export of North American energy — including liquefied natural gas (LNG), propane, and butane — without high exposure to price fluctuations.
As North American exports become increasingly attractive to global buyers seeking alternatives to unstable regions, ETFs like the Alerian MLP ETF (AMLP) and the Alerian Energy Infrastructure ETF (ENFR) offer exposure to the companies moving and storing energy, ultimately facilitating North American energy exports. Current market dynamics have also largely alleviated concerns regarding U.S. oil volume declines, according to Morris.
Geopolitical instability has forced a renewed emphasis on energy security, reliability, and affordability. This shift has created a unique role for nuclear and coal. They provide the consistent baseload power that renewable sources cannot yet match.
The case for nuclear has been bolstered by the need for energy security, as countries that depend on LNG imports for power find themselves in a difficult position, Morris said. The Range Nuclear Energy Index ETF (NUKZ) provides a vehicle for advisors to capture the nuclear renaissance driven by both government policy and massive power demands from technology infrastructure.
Additionally, coal remains a critical component of global energy security. The Range Global Coal Index ETF (COAL) offers exposure to global companies involved in the coal industry. Coal has not historically suffered from supply disruptions akin to what has been seen for LNG. This makes it an important component of the energy mix for many countries, particularly in Asia.
The Case for a Permanent Allocation
Energy stocks ended 2025 at less than 3% of the S&P 500, a weighting that Morris suggests may be too low given the sector’s performance as an inflation and geopolitical hedge. In 2022 and throughout recent volatility, energy has frequently been the only sector providing positive returns in a down market.
Advisors should view these specialized energy ETFs not just as cyclical trades, but as long-term portfolio holdings. This is especially true with the income provided by midstream. For coal and nuclear, the energy security theme suggests that these allocations may help build a well-diversified portfolio.
See more: Mapping the Long-Term Growth of Midstream Energy Infrastructure
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP, ENFR, COAL, and NUKZ for which it receives an index licensing fee. However, AMLP, ENFR, COAL, and NUKZ are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP, ENFR, COAL, and NUKZ.
