This is a predominantly large-cap index mixed with mid-teens exposure to mid-cap stocks. Past that, though, you're getting a similar flavor of exposure to XLE. This Fidelity ETF tracks the MSCI USA IMI Energy Index, which results in roughly 120 holdings versus just more than 20 for the XLE. The good news: With FENY, you don't get less for your money – you get more. Some fund investors simply prefer to choose the least expensive fund on offer, and in the energy sector, that's currently the Fidelity MSCI Energy ETF ( FENY, $23.52). Learn more about XLE at the SPDR provider site. In fact, you could argue that the heavy allocations to Exxon and Chevron act as ballast because parts of these integrated majors' businesses can still profit even when oil prices aren't rising. Notably, though, you're getting an outsized amount of exposure to two stocks: Exxon Mobil ( XOM, 23% weighting) and Chevron ( CVX, 20%) that combine to account for well more than 40% of XLE's assets.Ĭoncentration risk is a serious concern for many ETFs – if one or two stocks account for so much of the portfolio, how much diversification are you really getting, after all? But that's admittedly less of a concern in energy, where most stocks (large and small) ebb and flow based on the underlying commodity prices. Translation: You're getting a concentrated heap of big, blue-chip, U.S.-based oil-and-gas exposure. XLE, which will celebrate its 25th birthday next December, is pretty straightforward: It's a collection of the (currently 23) energy-sector stocks found within the S&P 500. 2, the Vanguard Energy ETF ( VDE, ~$8 billion in AUM). At $38 billion, XLE has roughly five times as much in assets under management than No. Expenses: 0.10%, or $10 annually on a $10,000 investmentĮvery conversation about energy ETFs rightfully should begin with the Energy Select Sector SPDR Fund ( XLE, $86.60) – the largest such exchange-traded fund on the market by a country mile.
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