The $33B Energy ETF Drawing Wall Street’s Attention

Money speaks louder than words on Wall Street. Right now, it’s whispering about energy.

Our TrackStar data reveals financial professionals flocking to the Energy Select Sector SPDR Fund (XLE), making it the most-searched ETF last month with 1,315 queries.

This surge in interest isn’t just market noise. While tech stocks grab headlines, energy companies quietly build cash reserves, boost dividends, and trade at compelling valuations.

XLE packages the sector’s heavyweights into a single fund that’s up 16.7% this year. Yet beneath these returns lies a story of transformation as energy giants pivot toward a complex future of traditional and renewable resources.

Key Facts About SMH

• Net assets: $32.9 billion
• 12-month trailing yield: 3.54%
• Inception: December 16, 1998
• Expense ratio: 0.09%
• Number of holdings: 24

XLE cuts through the complexity of energy investing with ruthless simplicity. It targets the sector’s largest players, using market capitalization to separate the giants from the wildcatters.

This approach creates a portfolio anchored by established producers. Think of it as owning a slice of America’s energy infrastructure, from West Texas oil fields to Gulf Coast refineries.

Source: StateStreet

The fund’s largest positions read like a who’s who of energy:

• Exxon Mobil (23.1%): The industry’s research powerhouse, betting big on carbon capture
• Chevron (15.3%): Balancing oil production with renewable investments
• ConocoPhillips (8.1%): The pure-play producer turning free cash flow into shareholder returns

Performance

Numbers tell the real story. XLE’s 16.7% gain this year puts it ahead of many market darlings. The three-year return sits at an impressive 25.2%, proving energy’s resilience through the post-pandemic recovery.

Even more telling? The five-year return of 15.8% spans multiple oil price cycles, showing this isn’t just a commodity play. Since 1998, the fund has returned 8.2% annually, demonstrating energy’s lasting role in investment portfolios.

Source: StateStreet

Competition

This time around, our comparison pits the XLE against the other sector ETFs to give you a clear performance picture.

• Financial Select Sector SPDR Fund (XLF): Banks, insurance, and brokers.
• Health Care Select Sector SPDR Fund (XLV): Pharmaceuticals, Biotech, and health care delivery.
• Technology Select Sector SPDR Fund (XLK): Software, hardware, microprocessors, internet, and AI.
• Real Estate Select Sector SPDR Fund (XLRE): Pretty much just Real-Estate-Investment-Trusts.

It’s no surprise that technology outperformed all other sectors. Yet, energy is the second-best performer in the top five searches based on our TrackStar data.

Our Opinion 10/10 

XLE isn’t just an ETF – it’s effectively a bet on America’s energy backbone. The 0.09% expense ratio means more profits flow to investors, not fund managers.

This fund suits investors seeking exposure to energy’s transformation. Yes, it’s concentrated in a few names. But these companies have survived oil embargoes, price wars, and technological disruption.

For those seeking to energize their portfolio, XLE offers a compelling blend of current income and future potential. Just remember: in energy, like physics, every action has an equal and opposite reaction.