This unique kind of company is typically an energy infrastructure stock that has capital-intensive operations building out pipelines and storage facilities. The Alerian MLP ETF ( AMLP (opens in new tab), $37.97) focuses on just one unique subsector of energy, providing investors with exposure to an income-rich corner of Wall Street via a portfolio of master limited partnerships, or MLPs. Learn more about VDE at the Vanguard provider site. The Vanguard Energy ETF is up more than 44% for the year-to-date. Interestingly enough, this diversification has actually resulted in slightly better returns than the Energy Select Sector SPDR Fund so far in 2022. But you'll also find smaller exploration and production firms like mid-sized player Ovintiv ( OVV (opens in new tab)) in the portfolio once you push past the usual suspects. The lineup is similar to XLE, with Big Oil mainstays like Exxon and Chevron at the top of the list. And while it, too, is weighted by market cap to make it a bit top-heavy – roughly two-thirds of the assets are allocated toward the top 10 stocks alone – VDE does a better job of spreading its cash around. This Vanguard fund has a portfolio of just over 100 stocks at present. Widening the net across a host of smaller players in the sector, the Vanguard Energy ETF ( VDE (opens in new tab), $111.78) is another established and liquid energy ETF worth a closer look. Learn more about XLE at the SPDR provider site. So in 2022, that focus on a short list of stocks hasn't exactly held this fund back. But depending on your investment goals, this overreliance on Big Oil may not be too off-putting given that smaller energy stocks tend to be much more volatile than their mega-cap cousins.īesides, XLE is up more than 43% so far this year. With that kind of bias, you may wonder why you need an ETF at all instead of just buying a handful of big oil stocks directly. Specifically, Exxon Mobil ( XOM (opens in new tab)) and Chevron ( CVX (opens in new tab)) represent more than 40% of the entire portfolio between them at present. And thanks to a weighting by market value, it allows the biggest stocks on its already short list of components to carry a ton of weight. There are a mere 22 total holdings at present. ![]() ![]() However, it's worth noting that XLE isn't particularly clever in its formulation. Those structural benefits alone make the Energy Select Sector SPDR Fund worth a look. 2 fund in the category, and regularly sees average trading volume of 30 million shares each session. It boasts more than four times the assets of the No. XLE debuted way back in 1998 when ETFs were far less popular. The fund stands head and shoulders above the rest. When it comes to picking the top energy ETFs, the Energy Select Sector SPDR Fund ( XLE (opens in new tab), $79.48) makes it easy. Expenses: 0.10%, or $10 annually on a $10,000 investment.
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