Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Energy Select Sector SPDR Fund (AMEX: XLE ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Energy Select Sector SPDR and see what CAPS investors are saying about the ETF right now.
Energy Select Sector SPDR facts
||Seeks to replicate the Energy Select Sector Index, which contains companies that primarily develop oil and natural gas, as well as provide drilling and other energy-related services.
|1-Year / 3-Year / 5-Year Annual Returns
||7.6% / 11.8% / 4.2%
|Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio Weight
||ExxonMobil (NYSE: XOM ) (18.4%)
Chevron (NYSE: CVX ) (14.3%)
Schlumberger (NYSE: SLB ) (7.1%)
||iShares S&P Global Energy (AMEX: IXC )
SPDR S&P Oil & Gas Exploration & Production (AMEX: XOP )
Sources: Morningstar and Motley Fool CAPS.
On CAPS, 93% of the 657 members who have rated Energy Select Sector SPDR believe the ETF will outperform the S&P 500 going forward. These bulls include imajerbear and StavrosW.
Having gotten on board last year, imajerbear summed up the opportunity:
Energy is one of the long term places to be. I feel that we are 15 to 20 years out from alt energy making significant inroads on oil and gas usage. Barring a global meltdown, oil can only go up. ... Too many people not enough energy.
Energy Select Sector SPDR, in particular, sports a low expense ratio of 0.20%. That's cheaper than that of other energy ETFs like iShares S&P Global Energy (0.48%) and SPDR S&P Oil & Gas Exploration & Production (0.35%).
CAPS member StavrosW elaborates on the bull case:
Nowhere do the simple rules of supply & demand present themselves more evidently than in energy. Energy is driven by oil right now, which we all know is of a very limited quantity. This is a no-loss situation if you are a long term player. ... [W]ith a ever growing global community, increasing demands on energy, no real alternative as of yet, and a very limited supply, this one is a winner.
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