Why Vanguard Energy ETF Might Be One of the Best ETFs to Invest In Today

When building a diversified investment portfolio, identifying exchange-traded funds (ETFs) that align with emerging market trends can be challenging. However, there’s a compelling case to be made for considering energy-focused ETFs in today’s market, particularly the Vanguard Energy ETF (ticker: VDE). This fund stands out as one of the best ETFs to invest in right now for investors seeking both value and growth potential.

Three Compelling Reasons to Consider This ETF

The Vanguard Energy ETF offers a trifecta of advantages that merit serious attention. First, as a Vanguard product, it carries one of the industry’s lowest price tags—an expense ratio of just 0.09% annually. This translates to only $9 per year for every $10,000 invested, allowing your capital to work harder for you rather than lining the fund manager’s pockets.

Second, the fund provides reliable passive income through a respectable dividend yield of 3%, making it attractive for those seeking cash flow from their investments. Third, and perhaps most importantly, the energy sector is positioned for substantial growth due to a seismic shift in global power demand.

The Case for Energy: How AI Is Reshaping Demand

The explosion of artificial intelligence infrastructure is fundamentally transforming energy consumption patterns. Data centers powering AI applications are no longer niche facilities—they’re becoming a dominant force in global electricity demand. According to BloombergNEF’s latest analysis, data-center power consumption is projected to reach 106 gigawatts by 2035, representing a staggering 36% increase from their forecast just seven months prior.

The scale of this shift is breathtaking. Today, only 10% of data centers consume more than 50 megawatts of electricity. Within the next decade, however, newly constructed facilities will routinely exceed 100 megawatts. The most ambitious projects are even more impressive—nearly 25% of new data centers will require 500 megawatts or more, with some exceeding 1 gigawatt entirely.

This exponential growth in data-center infrastructure means sustained, long-term demand for energy production. Unlike cyclical energy demands from manufacturing or transportation, the AI revolution is creating a structural shift in baseline power requirements. For energy companies and the stocks they represent, this translates into a multi-decade tailwind.

Why Passive Income Through Energy Exposure Makes Sense Now

Investors often hesitate about energy sector exposure due to historical volatility and environmental concerns. However, the sector’s fundamental dynamics have shifted. The combination of rising AI-driven demand, aging power infrastructure requiring modernization, and renewable energy integration projects creates a complex but favorable environment for energy producers.

The Vanguard Energy ETF allows you to gain diversified exposure to this sector through a single, low-cost investment vehicle. Rather than picking individual energy stocks, you’re spreading risk across multiple companies while capturing the sector’s upside potential. The 3% dividend yield provides immediate income while you wait for potential capital appreciation.

Evaluating Your Options

While the Vanguard Energy ETF presents a compelling opportunity for investors seeking best ETFs to invest in right now, individual circumstances vary. Consider whether energy exposure aligns with your long-term investment objectives, risk tolerance, and overall portfolio allocation. For those with a multi-year investment horizon and interest in passive income, this fund warrants serious evaluation as part of a broader investment strategy.

The convergence of AI infrastructure boom, aging energy infrastructure, and the fund’s inherently low costs creates a historically favorable setup for energy-focused investing.