We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Invest in the Vanguard Energy ETF (VDE)?
Read MoreHide Full Article
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Vanguard Energy ETF (VDE - Free Report) , a passively managed exchange traded fund launched on 09/23/2004.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $8.73 billion, making it one of the largest ETFs attempting to match the performance of the Energy - Broad segment of the equity market. VDE seeks to match the performance of the MSCI US Investable Market Energy 25/50 Index before fees and expenses.
The MSCI US Investable Market Index (IMI)/Energy 25/50 is made up of stocks of large, mid-size, and small U.S. companies within the energy sector.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 21.35% of total assets, followed by Chevron Corp. (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 67.69% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Energy ETF has added roughly 41.30% so far, and was up about 59.24% over the last 12 months (as of 05/06/2022). VDE has traded between $63.79 and $114.24 in this past 52-week period.
The ETF has a beta of 1.43 and standard deviation of 41.34% for the trailing three-year period, making it a high risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Energy ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VDE is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Energy ETF (IYE - Free Report) tracks Dow Jones U.S. Oil & Gas Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. IShares U.S. Energy ETF has $3.80 billion in assets, Energy Select Sector SPDR ETF has $38.80 billion. IYE has an expense ratio of 0.41% and XLE charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Invest in the Vanguard Energy ETF (VDE)?
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Vanguard Energy ETF (VDE - Free Report) , a passively managed exchange traded fund launched on 09/23/2004.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $8.73 billion, making it one of the largest ETFs attempting to match the performance of the Energy - Broad segment of the equity market. VDE seeks to match the performance of the MSCI US Investable Market Energy 25/50 Index before fees and expenses.
The MSCI US Investable Market Index (IMI)/Energy 25/50 is made up of stocks of large, mid-size, and small U.S. companies within the energy sector.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 21.35% of total assets, followed by Chevron Corp. (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 67.69% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Energy ETF has added roughly 41.30% so far, and was up about 59.24% over the last 12 months (as of 05/06/2022). VDE has traded between $63.79 and $114.24 in this past 52-week period.
The ETF has a beta of 1.43 and standard deviation of 41.34% for the trailing three-year period, making it a high risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Energy ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VDE is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Energy ETF (IYE - Free Report) tracks Dow Jones U.S. Oil & Gas Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. IShares U.S. Energy ETF has $3.80 billion in assets, Energy Select Sector SPDR ETF has $38.80 billion. IYE has an expense ratio of 0.41% and XLE charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.