Equity: U.S. Energy
With 10 ETFs and over $23.24B in combined AUM, the Equity: U.S. Energy segment provides exposure to the U.S. space with a focus on Energy securities.
Year-to-date, the best-performing ETF in the segment is the PowerShares S&P SmallCap Energy Portfolio (PSCE), with a total return of -5.16%. Meanwhile, the most popular ETF is the Energy Select Sector SPDR Fund (XLE) with $17.18BB in assets under management.
Investors should take a look at the Vanguard Energy ETF (VDE). This fund has been chosen as an Analyst Pick by FactSet, thus is the best ETF for the average investor. The Vanguard Energy ETF tracks a market-cap-weighted index of US energy companies. The index includes those companies deemed investable by MSCI and covers 98% of the market. VDE has an expense ratio of 0.10% and tracks the MSCI US Investable Market Energy 25/50 Index.
ETF.com Efficiency Insight
The average efficiency score in the Equity: U.S. Energy segment is 95 out of 100, with the Fidelity MSCI Energy Index ETF(FENY) obtaining the highest rating of 100 out of 100.
Costs dominate the discussion around efficiency. ETFs in the segment have an average expense ratio of 0.35% per year, with the Fidelity MSCI Energy Index ETF (FENY) having the lowest expense ratio, charging investors 0.08% yearly.
Investors should look for funds with tight tracking, such as the Vanguard Energy ETF (VDE), with a 12-month median tracking difference of -0.05%.
ETF.com Tradability Insight
The average tradability score in the Equity: U.S. Energy segment is 93 out of 100, with the iShares U.S. Energy ETF(IYE) obtaining the highest rating of 99 out of 100.
The Energy Select Sector SPDR Fund (XLE) is the undisputed segment leader when it comes to liquidity. The fund trades 1.13B in daily average volume. Investors should also find ample liquidity in the Vanguard Energy ETF (VDE), with $35.59M in daily dollar volume.
Use limit orders to trade funds such as the PowerShares S&P SmallCap Energy Portfolio(PSCE), due to their double-digit market spreads.
ETF.com Fit Insight
The Thomson Reuters US Energy - Fossil Fuels has been selected as the index that most accurately represents the market in question. The benchmark has been selected by the ETF Analytics team at FactSet, according to a series of guidelines to ensure this index accurately captures its market.
Investors trying to match a broad market exposure should pay attention to IYE. This fund obtains a high Fit score and investors should capture market-like returns.
Other funds diverge from the market, by nature of their investment mandates; for example, PSCE follows a Vanilla strategy and obtains a low Fit score compared with our neutral benchmark.