Which Energy ETF Is a Better Buy: Broad Vanguard Fund or Concentrated XLE?
State Street's concentrated 21-stock portfolio trades slightly lower fees for less diversification than Vanguard's 112-stock approach, though both delivered nearly identical 47% returns over the past year.
Overview
State Street Energy Select Sector SPDR ETF (NYSEMKT:XLE) and Vanguard Energy ETF (NYSEMKT:VDE) both offer targeted exposure to the U.S. energy industry, but they differ significantly in portfolio concentration and depth.
Energy sector investments often serve as a hedge against inflation or a play on rising commodity prices. This comparison looks at two of the most popular vehicles for this purpose: one that limits itself to the largest players in the S&P 500, and another that casts a much wider net across the entire U.S. investable market, including small-cap and mid-cap companies. Understanding these nuances is key for investors seeking specific levels of diversification within a volatile sector.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.
Related Articles
- What Does a D-Wave Quantum Insider's Sale of 23,850 Shares Mean for Investors?
- Rigetti Computing's COO Sells Over 9,000 Company Shares. What Does That Mean for Investors?
- Micron Stock Is Up 30% From Its Recent Low. Here's How Much a $5,000 Investment Today Could Be Worth by Next Year, According to Wall Street Analysts.