Oil Stock ETF Information

Traditionally when stock market investors wanted to participate in the crude oil sector they would buy stock in oil companies. Now instead of choosing among the companies investors can purchase Oil Company ETFs that are designed to track indicies such as the S&P Energy Index. This makes it easier for individuals to participate without being subject to excess company specific risk such as an oil spill etc.

XLE - Energy Select Sector SPDR seeks to match the performance before fees and expenses of the energy companies in the Energy Select Sector. Look at the holdings it's a who's who of large cap energy companies with the Top 3 Holdings being Exxon Mobile, Chevron and Schlumberger. XLE began trading 12/16/1998 making it one of the oldest sector specific ETFs and is sponsored by State Street Securities.

It recently had net assets of $7.33 Billion and Average Daily Trading Volume was roughly 14 Million so it's an extremely liquid investment or trading vehicle. The annual expense ratio is .22% (22 Basis Points).

Comparing the performance of XLE to the crude oil etf USO you can see that XLE has generally outperformed the basic Oil ETF. In addition to price performance XLE also pays a small dividend (currently 1.61%).

Performance of XLE  VS USO Since it's Inception

Chart begins on the first trading date of USO

When you compare XLE to the Amex Oil and Gas Index you can see a very strong correlation between the two with XLE slightly outperforming in recent months.

XLE VS Amex Oil and Gas Index (XOI)

Chart begins 1/1/2003

OIH - Oil Services HOLDR is more heavily weighted in the oil services sector instead of having large positions in the integrated oil companies like XLE. It's largest holdings are Baker Hughes, Schlumberger and Haliburton which explains the difference in performance between it and XLE recently.

OIH was established 2/6/2001 and recently had net assets of $3.25 Billion and an average daily trading volume over 4 million shares per day making it very liquid trading and investment vehicle as well.

You can see the historical correlation between these two Oil Stock ETFs were very close until the financial crisis hit, followed by the BP Oil Spill.

OIH Performance Since 2003 VS XLE

Chart begins 1/1/2003