Energy ETFs XLE and VDE notch record highs as oil hits a 13-year high
The market’s largest two energy exchange traded funds, Energy Select Sector SPDR ETF (NYSEARCA:XLE) and the Vanguard Energy ETF (NYSEARCA:VDE), have hit record trading highs as crude oil (CL1:COM) prices march upward, touching $116.57 a barrel on Thursday, a 13 year plus high.
XLE topped $73.50 a share, and VDE hit $102.18 a share. Furthermore, XLE now finds itself +31.2% YTD, and VDE is +30.3% in 2022.
Both XLE and VDE offer investors broad-based exposure to the energy market that includes access to companies in the oil, gas and consumable fuel, energy equipment and services industries. Both funds offer many similarities, but they also have some key differences.
While both funds provide the same 0.10% expense ratio, they come with much different liquidity levels. From an asset under management standpoint, XLE is the larger, more liquid fund with $37.21B under its belt, while VDE is smaller in nature with $7.16B to its name.
Moreover, portfolio and concentration risk is another differentiator between XLE and VDE. VDE offers a much broader exposure with 106 holdings and a top ten asset concentration of 67%. XLE on the other hand, brings forward only 24 holdings and a more densely top ten asset concentration holdings of 76%.
Holding-wise, both XLE and VDE have similar holdings, just with different weightings. Both funds include Exxon Mobil Corporation (NYSE:XOM), Chevron (NYSE:CVX), EOG Resources (NYSE:EOG), ConocoPhillips (NYSE:COP), and Schlumberger Limited (NYSE:SLB) in their top five. See the below table that breaks down the top holdings of both ETFs.
XLE and VDE along with other oil and gas exchange traded funds may see some additional support towards broader gains as a new bipartisan bill is being worked on that would ban U.S. imports of Russian oil, liquified natural gas, petroleum, and petroleum products.