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In this episode of ETF Spotlight, I speak with Stacey Morris, head of energy research at VettaFi, about investing in the hot energy sector using ETFs.
Energy is the best performing sector again this year, up about 60%. Can the positive momentum continue after two phenomenal years? We discuss the key investment themes for the space.
Most popular products in the sector--the Energy Select Sector SPDR ETF (XLE - Free Report) and the Vanguard Energy ETF (VDE - Free Report) --are market-cap-weighted. Top holdings--Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) --account for about 40% of their portfolios.
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) is an equal-weighted ETF. It tilts away from the oil giants and toward small- and mid-cap companies. Occidental Petroleum (OXY - Free Report) is the top holding currently. Investors should however remember that E&P companies have high sensitivity to commodity prices.
The VanEck Oil Services ETF (OIH - Free Report) invests in 25 largest and most liquid oil services companies. Schlumberger (SLB - Free Report) , which rebranded as SLB last month, and Halliburton’s (HAL - Free Report) are its top holdings. Oilfield services stocks are generally less volatile than those of oil producers.
The Alerian MLP ETF (AMLP - Free Report) holds energy infrastructure MLPs that earn most of their cash flow from midstream activities.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.
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What Lies Ahead for Energy Stocks & ETFs
In this episode of ETF Spotlight, I speak with Stacey Morris, head of energy research at VettaFi, about investing in the hot energy sector using ETFs.
Energy is the best performing sector again this year, up about 60%. Can the positive momentum continue after two phenomenal years? We discuss the key investment themes for the space.
Most popular products in the sector--the Energy Select Sector SPDR ETF (XLE - Free Report) and the Vanguard Energy ETF (VDE - Free Report) --are market-cap-weighted. Top holdings--Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) --account for about 40% of their portfolios.
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) is an equal-weighted ETF. It tilts away from the oil giants and toward small- and mid-cap companies. Occidental Petroleum (OXY - Free Report) is the top holding currently. Investors should however remember that E&P companies have high sensitivity to commodity prices.
The VanEck Oil Services ETF (OIH - Free Report) invests in 25 largest and most liquid oil services companies. Schlumberger (SLB - Free Report) , which rebranded as SLB last month, and Halliburton’s (HAL - Free Report) are its top holdings. Oilfield services stocks are generally less volatile than those of oil producers.
The Alerian MLP ETF (AMLP - Free Report) holds energy infrastructure MLPs that earn most of their cash flow from midstream activities.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.