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XLE vs. VDE: Energy ETF Showdown
26 Jun
Summary
- XLE offers concentrated exposure to S&P 500 energy giants.
- VDE provides broader diversification across 111 energy stocks.
- XLE is marginally cheaper with a slightly higher dividend yield.
Investors weighing energy exchange-traded funds (ETFs) must decide between concentrated industry giants or broader market diversification. The State Street Energy Select SPDR ETF (XLE) mirrors the S&P 500's energy sector, holding 21 stocks, with ExxonMobil (22.44%) and Chevron (16.6%) as top holdings. Launched in 1998, it has a 0.08% expense ratio and a slightly higher dividend yield.
Vanguard Energy ETF (VDE), established in 2004, offers a wider perspective with 111 stocks. Its largest holdings include ExxonMobil (21.98%) and Chevron (14.21%). VDE tracks a broader index, capturing about 90 additional companies, including smaller exploration and production firms, at a 0.09% expense ratio. The dividend payout for VDE was $3.93 per share over the trailing 12 months, compared to XLE's $1.88 per share.
