The Energy Select Sector SPDR® Fund (XLE Stock) invests in energy stocks that are part of the S&P 500. In other words, by holding XLE you’re investing in the largest US Energy companies. It’s an easy and effective to way to gain exposure to a diversified portfolio of energy stocks.
XLE is a passive ETF. The role of the managers is to acquire constituents of the Energy Select Sector Index with the S&P 500. In essence the fund invests in the follwing fields:
- gas and consumable fuels
- energy equipment and services
XLE is a large fund with over 30 Billion dollars in Assets.
Beta (5 years) = 1.54
|Exxon Mobil Corp||23.70%|
|EOG Resources Inc||4.46%|
|Marathon Petroleum Corp||4.17%|
|Pioneer Natural Resources Co||4.08%|
|Kinder Morgan Inc Class P||3.85%|
|Williams Companies Inc||3.50%|
Is XLE a good investment?
XLE is an energy play. Meaning, if you are bullish on the energy sector, then XLE is great choice. It invests only in large cap and well established energy companies.
XLE is great if you are looking to diversify your portfolio at a cheap cost.
The main drawback of the fund is the fact that half of the portfolio is comprised of Exon and Chevron. Since the fund is market weighted, the two largest oil companies in the US make up half of its portfolio.