XLE Energy Select Sector SPDR ETF Is Rising
πππ$Energy Select Sector SPDR Fund(XLE)$ has been rising recently. On a day when the US markets are down, XLE which tracks a market cap weighted index of US Oil Giants, is up 1.4% today and has risen by 3.3% in the past 5 days. XLE is now up 13.8% year todate and in 2023, XLE has increased 11%.
With oil demand outpacing supply, oil prices have surged, boosting XLE ETF. Oil gains have come amid OPEC production cuts and global instability in Ukraine and the Middle East. The price benchmark for crude oil futures in the US is up about 20% year todate to its current USD 85 per barrel. In March the price rose about 6%.
JP Morgan analysts projected that oil production will grow by single digits this year and oil prices could hit USD 100 per barrel by September. Consumer demand for oil and gas continues to rise especially heading towards spring and summer when oil prices tend to rise.
With XLE, I gain access to the Top US Oil companies. These include $Exxon Mobil(XOM)$ $Chevron(CVX)$ Conoco Phillips, EOG Resources, Marathon Petroleum and Warren Buffett's favourite oil company $Occidental(OXY)$
The Top 10 holdings weightage is 76%. Total number of holdings is 25. The expense ratio is 0.09%. Distributions are paid quarterly. The current distribution yield is 3.15%.
I have invested in XLE prior to the Ukraine war and held it till now. I am happy that it is currently up 63%. XLE is my hedge against high inflation. I also like the regular distributions paid every 3 months which is a great source of passive income while waiting for capital growth. That's my favourite kind of investing. Buy and Hold and my favourite holding period is Forever!
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