- The Energy sector ETF XLE holds a very small number of large-cap oil and gas-related stocks selected from the S&P 500, far fewer than its rivals.
- Its performance over the past decade has been inconsistent. An equal-weighted holding of just its two top stocks, XOM and CVS, has almost always outperformed XLE.
- XLE is not a foolproof hedge against inflation because so many other factors besides Russia's invasion of Ukraine have created it. Broader commodity strategies may be preferable.
- Oil stocks over the past 20 years have mainly appealed to those looking for safe, higher-than-market dividends. XLE's dividend is not competitive with a small holding of individual oil stocks.
For further details see:
Is XLE ETF A Good Buy Now?