Use These ETFs to Play Energy

Energy investments take different forms [View in browser]( BROUGHT TO YOU BY: Proprietary Data Insights Financial Pros Top Energy ETF Searches In The Last Month Rank Name Searches #1 Energy Select Sector SPDR Fund 1795 #2 iShares Global Energy ETF 641 #3 SPDR S&P Oil & Gas Exploration & Production ETF 334 #4 Vanguard Energy ETF 129 #5 First Trust ISE-Revere Natural Gas Index Fund 44 #ad [How I Turned My $50,000 Into $5.3 Million]( Brought to you by [Investing Daily]( [How I Turned My $50,000 Into $5.3 Million]( After cutting my teeth at the “most powerful firm on Wall Street”….spending 70+ hours per week slaving away… missing birthdays, reunions, and virtually every other social event… I was tired... tired of burning the midnight oil for the likes of Goldman Sachs and Citigroup… faceless companies that couldn’t care less how I end up… as long as the shareholders are happy… it was soul crushing… And I wanted out. So I turned my attention to the only exit out of the rat race I knew… trading the markets. After a lot of research (and a few lucky breaks) I found my groove… 10 short years later… I was “retired” at the ripe old age of 37…with just over $5.3 million in the bank. Now I spend my time showing other investors how to avoid taking the hard road (like I did)…and rack up profits along the way. Interested? [Consider THIS your invitation to uncover this secret for yourself]( ETF Use These ETFs to Play Energy If you believe that a specific sector will outperform the market, then ETFs are the easiest, fastest, and safest ways to gain exposure. And while it might not beat out the returns of the top performing individual stocks in that sector, it takes a lot of the guessing out because it gives you a diversified basket of stocks. Energy is one of the hottest sectors in 2022—with energy stocks significantly outperforming the broader market. Today we’re going to look at two of the most compelling ETFs in the energy sector, compare them, and attempt to give you the verdict on which is better. SPDR S&P Oil & Gas Exploration & Production ETF (XOP) tries to provide exposure to the oil, gas, exploration, and production segment of the S&P TMI, which consists of the following sub-sectors Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing. The second ETF we’ll be looking at is The Energy Select Sector SPDR Fund (XLE), which is also from State Street Global Advisors. XLE tries to provide exposure to companies in the oil, gas, and consumable fuel, energy equipment, and services industries. We chose these ETFs as they landed in 1st (XLE) and 3rd (XOP) respectively amongst the top energy ETF searches by financial pros. Plus, as you’ll soon find out, they offer excellent liquidity and different ways to play the sector. [Don’t drink the kool-aid, sip on the Juice…(Ad)]( Subscribe to The Juice for FREE access to the insights generated from our proprietary database, revealing the stocks and industries financial professionals are researching along with financial strategies to help you make informed decisions. Sign up. [Sign up today.]( XLE vs. XOP Basics The XLE is a broader energy sector ETF that provides exposure to upstream, midstream, and downstream operations. Upstream operations include exploration and drilling, which is what the XOP focuses on. These stocks live and die by the price of crude oil and natural gas. Midstream operates profit of the volume they move to market, often set up as Master Limited Partnerships (MLPs) that pay healthy dividends. Downstream operations include refiners and gas stations. These operators benefit from the spread between crude oil and gas prices known as the ‘crack’ spread. For the most part, downstream operations like to see robust fuel demand. XLE vs. XOP Holdings XLE is heavily concentrated in two stocks, Exxon Mobil Corporation (XOM), and Chevron Corporation (CVX), which comprise about 44% of the ETFs weighting. On the other hand, XOP is significantly more diversified, with the highest weighted stock, Occidental Petroleum Corporation (OXY), making up just 2.36% of the ETFs weighting. XLE Holdings: XOP Holdings: XOP vs. XLE Performance XLE is up 36.7% YTD. A $10K investment in the ETF 10 years ago would be worth $15,619 today, representing a more than 56% gain. XOP is up 38.29% YTD. A $10K investment in the ETF 10 years ago would be worth $15,048 today, representing a gain of more than 50%. Trading XOP vs. XLE XOP trades approximately 7.6 million shares daily, which is relatively good from a liquidity standpoint. XLE trades approximately 33.2 million shares daily, making it one of the most actively traded ETFs in the market. You can trade options on both symbols if you want. Both offer weekly options, with the XLE having higher liquidity in those options. Investing In XOP vs. XLE Investors love ETFs that pay dividends because it gives them a chance to earn income on their investments. XOP pays its shareholders an annual dividend of $2.08 per share. XLE pays its shareholders an annual dividend of $2.80 per share. Another consideration investors have is price. XOP is a more expensive ETF based on its share price, trading above $130 per share, while XLE is trading in the $70s. Whenever you invest in an ETF, you want to know the fees you’ll incur. XOP charges an expense ratio of 0.35%. While XLE charges an expense ratio of 0.10% Edge - Diversification: The winner is XOP - ETF Price: The winner is XLE because it’s priced lower - Performance: Tie - Expenses: The winner is XLE Our Opinion 10/10 Both of these ETFs offer exposure to the energy sector. The XLE is much broader than the XOP which focuses more on exploration and drilling. Given the shortages and supply chain issues in the global crude oil markets, we see ample demand and pricing power for crude oil operations. We view any recession related pullbacks in crude prices as an opportunity to enter either name. Just be sure to not double your exposure unexpectedly. [We want to hear from you! Let us know your thoughts by clicking here]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [allow us on your list](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](#). Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](