Oil Prices have just reached a 52 week high. What stocks are set to benefit from this?
Brent Crude has risen from a 52 week low of $46.88 to a 52 week high of $72.30. That’s an increase of 54% in oil prices in the past year. It appears that energy stocks haven’t risen anywhere near as fast as the oil prices. So is there value in this sector?
Picking a stock in this sector can be difficult as there are many underlying factors at play that the ordinary investor may struggle to get to grips with. A simpler way to play energy stocks would be to invest in the sector ETF. One such ETF is XLE. This ETF is like a basket of energy stocks.
It helps you to diversify your risk into the sector as opposed to an individual stock were there is so much risk involved. You can simply buy and sell the XLE as it it where a stock.
By investing in the XLE you are ultimately investing in a basket of stocks as opposed to one individual stock. There is less risk in this for you. For example, here are the top 10 holdings of the XLE and the weight they have in the XLE:
- Exxon Mobil Corp XOM 22.13%
- Chevron Corp CVX 17.24%
- Schlumberger Ltd SLB 6.84%
- ConocoPhillips COP 4.94%
- EOG Resources Inc EOG 4.77%
- Occidental Petroleum Corp OXY 4.34%
- Valero Energy Corp VLO 3.52%
- Phillips 66 PSX 3.43%
- Halliburton Co HAL 3.39%
- Marathon Petroleum Corp MPC 2.61%
With Oil Prices rising, now might be a good time to consider investing in this sector ETF.
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