XLE: Everything You Need To Know About Leading Energy ETF

(15min)

Summary

  • The Energy Select Sector SPDR offers low-cost exposure to U.S. oil and gas giants. It has a market-beating 3.3% dividend yield and an attractive valuation.
  • The fund is highly concentrated in a few large-cap oil and gas names, with limited international or renewable energy exposure.
  • Structural risks include declining long-term oil demand, carbon taxes, and macroeconomic factors, but supply shocks could drive future price surges.
  • Despite sector headwinds, XLE is a simple, effective ETF for U.S. energy exposure, suitable for value and income-focused investors.
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mysticenergy

With more than $25 billion of assets under management, The Energy Select Sector SPDR® Fund ETF (NYSEARCA:XLE) is one of the world's largest funds devoted specifically to energy stocks. The fund was founded back in 1998 as part of

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This article was written by

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Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of XOM,CNQ,BP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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