{"id":5695,"date":"2022-03-06T01:51:58","date_gmt":"2022-03-05T17:51:58","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?p=5695"},"modified":"2024-04-02T13:52:08","modified_gmt":"2024-04-02T05:52:08","slug":"etf-spotlight-oil-gold-dividends","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/magazine\/etf-spotlight-oil-gold-dividends\/","title":{"rendered":"ETF Spotlight: Oil, Gold, Dividends"},"content":{"rendered":"\n
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Between surging inflation and Russia\u2019s war with Ukraine, investors have a lot on their minds.<\/p>\n\n\n\n

Rising interest rates have spurred a rotation into cyclicals and value stocks from tech and growth shares. At the same time, oil prices continue to climb and investors continue to seek out safe haven assets as the war in Ukraine intensifies. <\/p>\n\n\n\n

We look at ETFs covering oil, gold, and dividend stocks in this edition of ETF Spotlight. <\/p>\n\n\n\n

XLE: The Energy Select Sector SPDR Fund<\/strong><\/h2>\n\n\n\n

The energy sector was the best performer in 2021 and has continued its winning streak in 2022 so far. Energy prices, especially crude oil, have been rising on the back of Russia\u2019s war with Ukraine and already-tight supplies. <\/p>\n\n\n\n

XLE provides exposure to the energy sector of the S&P 500 index. It includes companies in the oil, gas and consumable fuel, energy equipment and services industries.<\/p>\n\n\n\n

As the oldest and largest energy ETF, XLE has assets under management (AUM) of $34 billion and a very low expense ratio of 0.10%. <\/p>\n\n\n\n

XLE holds just 21 energy stocks. Compared to other oil ETFs, it offers more targeted exposure to large-cap names with dividend paying track records. XLE\u2019s distribution yield stands at 3.4% and its top two holdings – Exxon Mobil and Chevron – make up almost 45% of the fund.<\/p>\n\n\n\n

These two companies are known dividend aristocrats and have been raising dividends annually for the last 30 years.<\/p>\n\n\n\n

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XLE top 10 holdings, as of 25 Feb 2022<\/figcaption><\/figure>\n\n\n\n

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GDX: VanEck Gold Miners ETF<\/strong><\/h2>\n\n\n\n

Gold is often seen as a hedge against inflation. During periods of volatility, many investors also turn to gold as a safe haven. Physical gold does not generate a cash flow but gold miners do.<\/p>\n\n\n\n

GDX gives investors exposure to gold mining companies. The fund is invested in the world\u2019s largest gold miners such as Newmont, Barrick Gold, and Franco-Nevada. These companies make up the fund\u2019s top three holdings with a combined weight of 38%.<\/p>\n\n\n\n

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GDX top 10 holdings, as of 1 March 2022<\/figcaption><\/figure>\n\n\n\n

Shares of gold mining companies can benefit not just from rising gold prices but also production growth. Gold miners can use the cash flow from producing gold to make further investments into their operations. <\/p>\n\n\n\n

On the flipside, rising costs and the mismanagement of mining operations are some factors that can cause gold miners to underperform.<\/p>\n\n\n\n

GDX has an expense ratio of 0.50%.<\/p>\n\n\n\n

SDY, DLN, VIG: Dividend ETFs<\/strong><\/h2>\n\n\n\n

Dividend stocks tend to exhibit lower volatility and are generally seen to be more defensive and conservative equity options.<\/p>\n\n\n\n

Here are three to consider.<\/p>\n\n\n\n

SPDR S&P Dividend ETF (SDY) <\/strong><\/h2>\n\n\n\n