Should You Invest in the State Street Energy Select Sector SPDR ETF (XLE)?

Designed to provide broad exposure to the Energy - Broad segment of the equity market, the State Street Energy Select Sector SPDR ETF (XLE) is a passively managed exchange traded fund launched on December 16, 1998.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.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 10, placing it in bottom 38%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $27.09 billion, making it the largest ETF attempting to match the performance of the Energy - Broad segment of the equity market. XLE seeks to match the performance of the Energy Select Sector Index before fees and expenses.The Energy Select Sector Index includes companies from the following industries: oil, gas & consumable fuels and energy equipment & services.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.It has a 12-month trailing dividend yield of 3.22%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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) accounts for about 22.95% of total assets, followed by Chevron Corp (CVX) and Conocophillips (COP).The top 10 holdings account for about 74.71% of total assets under management.Performance and RiskSo far this year, XLE has added roughly 7.1%, and it's up approximately 6.74% in the last one year (as of 12/18/2025). During this past 52-week period, the fund has traded between $38.22 and $47.065.The ETF has a beta of 0.59 and standard deviation of 21.78% for the trailing three-year period, making it a high risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.AlternativesState Street Energy Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLE is an outstanding 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) tracks S&P Global 1200 Energy Sector Index and the Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index. iShares Global Energy ETF has $1.83 billion in assets, Vanguard Energy ETF has $6.99 billion. IXC has an expense ratio of 0.4%, and VDE charges 0.09%.Bottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street Energy Select Sector SPDR ETF (XLE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks