Does Your Commodity ETF Own Oil Futures Or Oil Stocks?
“The volatility of the last two years has investors searching for investment vehicles that can help diversify their portfolios from the wild swings of the stock market. The old-school method often involves buying stocks in different asset classes (small, large, etc.), but even that would not have protected your portfolio in the treacherous recession of 2008,” Matthew McCall Reports From Investopedia.
McCall goes on to say, “An asset class that has attracted great fanfare the last decade has been the commodities. This explosion of popularity has to do with the performance of many of the commodities as well as the expansion of commodity ETFs. Until a few years ago, it was not easy for the average individual investor to invest in gold bullion or sugar futures. Today that can be accomplished using the same process as buying a stock online.”
“Delving further into commodity ETFs it is imperative to first explain the difference between ETFs that track commodity stocks and those that track the underlying commodity itself. The SPDRs Energy ETF (NYSE:XLE) is composed of a basket of stocks that do business in the energy sector. Many of the stocks will benefit from an increase in the rise of the price of oil, but there are other factors that affect each individual company. The United State Oil ETF (USO) actually own oil futures contracts that will move based on the price of oil. From 2007 through 2009, USO lost 24% as XLE only fell by 3%; a big difference considering the close connection the two ETFs have with each other. Investors must be aware of what an ETF invests in, stocks or the underlying commodity, before considering buying,” McCall Reports.
See more details to the story: HERE
We put together some details on the two ETFs below:
The Energy Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Energy Select Sector Index (ticker: IXE). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
| Fund Name: | Energy Select | |||
| Ticker Symbol: | XLE | |||
| Holdings: | As Of 03/22/2010 | |||
| Name | Weight | Ticker | Sector | Shares Held |
| Exxon Mobil Corp | 17.89 | (XOM) | Energy | 15637097 |
| Chevron Corp New | 12.8 | (CVX) | Energy | 10063581 |
| Schlumberger Ltd | 6.65 | (SLB) | Energy | 6128009 |
| Occidental Pete Corp Del | 4.91 | (OXY) | Energy | 3477478 |
| Conocophillips | 4.8 | (COP) | Energy | 5391093 |
| Anadarko Pete Corp | 3.39 | (APC) | Energy | 2813785 |
| Apache Corp | 3.3 | (APA) | Energy | 1903720 |
| Halliburton Co | 2.78 | (HAL) | Energy | 5317023 |
| Devon Energy Corp New | 2.77 | (DVN) | Energy | 2529985 |
| Xto Energy Inc | 2.7 | (XTO) | Energy | 3342865 |
| Eog Res Inc | 2.36 | (EOG) | Energy | 1511151 |
| Marathon Oil Corp | 2.21 | (MRO) | Energy | 4078249 |
| National Oilwell Varco Inc | 1.88 | (NOV) | Energy | 2605480 |
| Hess Corp | 1.86 | (HES) | Energy | 1776289 |
| Chesapeake Energy Corp | 1.69 | (CHK) | Energy | 4256226 |
| Baker Hughes Inc | 1.65 | (BHI) | Energy | 2027616 |
| Spectra Energy Corp | 1.62 | (SE) | Energy | 4264032 |
| Williams Cos Inc Del | 1.55 | (WMB) | Energy | 4040525 |
| Peabody Energy Corp | 1.53 | (BTU) | Energy | 1921967 |
| Southwestern Energy Co | 1.48 | (SWN) | Energy | 2171006 |
| Smith Intl Inc | 1.47 | (SII) | Energy | 2014818 |
| Noble Energy Inc | 1.44 | (NBL) | Energy | 1166071 |
| Cameron International Corp | 1.39 | (CAM) | Energy | 1923096 |
| Valero Energy Corp New | 1.34 | (VLO) | Energy | 3869587 |
| Murphy Oil Corp | 1.2 | (MUR) | Energy | 1272783 |
| Massey Energy Corp | 1.19 | (MEE) | Energy | 1369976 |
| Pioneer Nat Res Co | 1.15 | (PXD) | Energy | 1284709 |
| Fmc Technologies Inc | 1.12 | (FTI) | Energy | 1076019 |
| Consol Energy Inc | 1.09 | (CNX) | Energy | 1422682 |
| Denbury Res Inc | 1.03 | (DNR) | Energy | 3905770 |
| Bj Svcs Co | 1.03 | (BJS) | Energy | 2784192 |
| El Paso Corp | 1.01 | (EP) | Energy | 5431914 |
| Range Res Corp | 1 | (RRC) | Energy | 1225337 |
| Nabors Industries Ltd | 0.89 | (NBR) | Energy | 2570959 |
| Diamond Offshore Drilling I | 0.81 | (DO) | Energy | 560101 |
| Cabot Oil & Gas Corp | 0.71 | (COG) | Energy | 1102963 |
| Sunoco Inc | 0.7 | (SUN) | Energy | 1366341 |
| Rowan Cos Inc | 0.68 | (RDC) | Energy | 1510935 |
| Tesoro Corp | 0.51 | (TSO) | Energy | 2169023 |
| Helmerich & Payne Inc | 0.34 | (HP) | Energy | 518593 |
| State Str Instl Liquid Resvs | 0.12 | 85749P9A | Unassigned | 7308374 |
| U.S. Dollar | -0.06 | CASH_USD | Unassigned | -3679201 |
The United States Oil Fund, LP (“USO”) is a domestic exchange traded security designed to track the movements of light, sweet crude oil (“West Texas Intermediate”). USO issues units that may be purchased and sold on the NYSE Arca. The investment objective of USO is for the changes in percentage terms of its units’ net asset value (“NAV”) to reflect the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract for light, sweet crude oil traded on the New York Mercantile Exchange (the “NYMEX”), less USO’s expenses.
Related posts:
- ProShares Files For ProShares Commodity Managed Futures Strategy ETF
- Commodity ETF Spotlight: iShares GSCI Commodity-Indexed Trust Fund In Focus (GSG)
- Commodity ETF Spotlight: GreenHaven’s Continuous Commodity Index Fund In Focus (GCC)
- Commodity ETF Spotlight: Pure Beta Broad Commodity ETN In Focus (BCM)
- Commodity Spotlight: Dow Jones-UBS Commodity Index Total Return ETN In Focus (DJP, USO, DBA, DBC, DBO)
ETFs what does this stand for??????
XLE what does this stand for?????????
Thanks
Wayne Borle