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Should You Invest in the Vanguard Energy ETF (VDE)?
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Launched on 09/23/2004, the Vanguard Energy ETF (VDE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $7.96 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 3.55%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 20.36% of total assets, followed by Chevron Corp. (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 64.80% of total assets under management.
Performance and Risk
The ETF has added roughly 0.29% and is down about -4.88% so far this year and in the past one year (as of 11/20/2023), respectively. VDE has traded between $105.87 and $130.56 during this last 52-week period.
The ETF has a beta of 1.37 and standard deviation of 31.32% for the trailing three-year period, making it a high risk choice in the space. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Energy ETF holds a Zacks ETF Rank of 1 (Strong 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 Global Energy ETF (IXC - Free Report) tracks S&P Global 1200 Energy Sector Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. IShares Global Energy ETF has $2.97 billion in assets, Energy Select Sector SPDR ETF has $37.80 billion. IXC has an expense ratio of 0.44% 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.
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Should You Invest in the Vanguard Energy ETF (VDE)?
Launched on 09/23/2004, the Vanguard Energy ETF (VDE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $7.96 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 3.55%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 20.36% of total assets, followed by Chevron Corp. (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 64.80% of total assets under management.
Performance and Risk
The ETF has added roughly 0.29% and is down about -4.88% so far this year and in the past one year (as of 11/20/2023), respectively. VDE has traded between $105.87 and $130.56 during this last 52-week period.
The ETF has a beta of 1.37 and standard deviation of 31.32% for the trailing three-year period, making it a high risk choice in the space. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Energy ETF holds a Zacks ETF Rank of 1 (Strong 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 Global Energy ETF (IXC - Free Report) tracks S&P Global 1200 Energy Sector Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. IShares Global Energy ETF has $2.97 billion in assets, Energy Select Sector SPDR ETF has $37.80 billion. IXC has an expense ratio of 0.44% 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.