The Energy Select Sector SPDR Fund is an exchange-traded fund (ETF) that aims to replicate the performance of a specific index, which focuses on the energy sector. To achieve this, the fund invests at least 95% of its total assets in the securities that make up the index, providing investors with broad exposure to the energy industry.
The index includes a diverse range of energy companies, categorized into two main industries: oil, gas, and consumable fuels; and energy equipment and services. This means that the fund's portfolio comprises companies involved in the exploration, production, and distribution of energy resources, as well as those that provide equipment and services to support the energy industry.
As a non-diversified fund, the Energy Select Sector SPDR Fund is allowed to invest a larger portion of its assets in a smaller number of securities, which can result in a more concentrated portfolio. This approach can be beneficial for investors who want to gain targeted exposure to the energy sector, but it also increases the risk of volatility.
The fund is listed on the NYSE Arca exchange under the ticker symbol XLE and is domiciled in the United States. For more information about the fund, investors can visit the website of the fund's issuer, State Street Global Advisors, at http://www.spdrs.com.