What XLE actually is

XLE follows the energy companies in the S&P 500, one of the Select Sector SPDR funds.

What is inside

Mostly large oil and gas producers and integrated companies such as Exxon Mobil and Chevron, plus refiners, pipeline firms and oilfield services.

Distributions

XLE pays quarterly. Energy companies have often paid above-average dividends, but the payouts depend on oil and gas prices and can fall when prices drop.

What to keep in mind

  • Commodity prices. The main driver of profits.
  • Concentration. Two companies are a big share.
  • Energy transition. Long-term demand is debated.

Quick take

XLE offers income and exposure to energy prices, with the swings that come with them.