Summary
Energy ETFs: VDE's Diversification Edge Over XLE's Size
Vanguard Energy ETF (VDE) and Energy Select Sector SPDR Fund (XLE) are both efficient, low-cost options for U.S. energy sector exposure. VDE offers broader diversification across 111 companies versus XLE's 22, though both remain highly concentrated in Exxon Mobil (XOM) and Chevron (CVX). Despite VDE's slight edge in diversification and risk-adjusted returns, the energy sector's poor momentum and high volatility warrant a hold rating for both ETFs.
Should You Invest in the Vanguard Energy ETF (VDE)?
Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Vanguard Energy ETF (VDE), a passively managed exchange traded fund launched on September 23, 2004.
How Investing $500 Monthly in This Vanguard ETF Could Create Nearly $5,700 in Annual Dividend Income
Mick Jagger and the Rolling Stones had it right when they sang, "Time Is on My Side." If you're looking to build up solid dividend income, time is on your side, too.
Vanguard Energy ETF (VDE) FAQ
What is the stock price today?
On which exchange is it traded?
What is its stock symbol?
Does it pay dividends? What is the current yield?
What is its market cap?
Has Vanguard Energy ETF ever had a stock split?
Vanguard Energy ETF Profile
| ARCA Exchange | US Country |
Overview
The described fund is a financial entity that specializes in employing an indexing investment approach, aiming to mirror the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50. This particular index captures a broad spectrum of U.S. companies within the energy sector across large, mid-size, and small market capitalizations, as defined by the Global Industry Classification Standard (GICS). The fund's investment strategy focuses on replicating the composition of its target index by investing all, or a substantial portion, of its assets into the stocks that constitute the index. It strives to maintain each stock in its portfolio in close proportion to its weighting within the index. It is important to note that this fund is categorized as non-diversified, which means it may invest a larger percentage of its assets in fewer stocks than a diversified fund, potentially leading to higher volatility and risk.
Products and Services
- Indexing Investment Approach:
This approach involves creating a portfolio that aims to replicate the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50. It is designed to cover the full spectrum of U.S. companies in the energy sector, irrespective of their market capitalization. The method relies on strict adherence to the index's composition, reducing active management in favor of following the market's natural fluctuations within the energy sector.
- Investment in U.S. Energy Sector Stocks:
The fund invests primarily in stocks of U.S. companies that operate within the energy sector. This includes a broad range of companies including those involved in the production and distribution of energy, as well as energy equipment and services. The investment strategy seeks to include companies of varying sizes, from large-sized to small-sized entities, offering investors exposure to the entire U.S. energy sector.
- Non-Diversified Portfolio:
As a non-diversified fund, this investment vehicle may allocate a significant portion of its assets into a limited number of stocks. This focus allows the fund to potentially capitalize on selected investments but also poses a higher risk due to reduced diversification. Investors considering this fund should be aware of the increased volatility and risk associated with the non-diversified status.
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