Energy ETFs Stand Up: Energy Select Sector SPDR Fund (XLE) vs Utilities Select Sector SPDR Fund (XLU)
By Gregory S. Davis, Reviewed by ETFReady.com Staff
Energy ETFs in Focus (XLE) vs (XLU)
AI and Data driven thirst for energy puts these two ETFs on center stage.
Artificial Intelligence and energy demand from tech companies including Amazon, Google and Microsoft puts the spotlight on ETFs focused on energy.
Energy Select Sector SPDR (XLE)
A traditional energy play may be sticking with petroleum and natural gas suppliers found in the Energy Select Sector SPDR (XLE).
XLE has an over 90% allocation to Oil and Gas companies with the remaining 8% focused on energy equipment and Services. As of October 10, 2025, the top XLE three holdings, making up about 47% of the portfolio are Exxon Mobil (XOM), Chevron Corp (CVM) and Conoco Phillips (COP).
Utilities Select Sector SPDR Fund (XLU)
Earlier in 2025 Meta, formerly Facebook, entered into a 20-year agreement with Constellation Energy to purchase nuclear energy. The Utilities Select Sector SPDR Fund (XLU) is one of the largest shareholders of Constellation Energy (CEG).
Unlike the petroleum heavy focused XLE, the XLU focus is on companies that produce, generate and transmit electricity or natural gas. As of October 10, 2025, the top XLU holdings, making up about 40% of the portfolio are NextEra Energy (NEE), Constellation Energy (CEG) and Southern Co (SO).
ETFReady Versus: XLE and XLU
Tale of the Tape
XLU is larger with $72 Billion in AUM, a higher year to date return at 17% and a larger number of holdings suggesting less volatility. The XLE has a lower PE Ratio at 16.53, signaling it may have less growth potential. The XLE also has a higher 5-year return of 29% and a higher fund yield at 3.24%.
The winner is the ETF that fits your personal goals and risk tolerance. The XLU appears to be the more practical of the two while the XLE may offer a higher expectation of future returns. Keep in mind, no one ratio tells the entire story. In addition, instead of either or, maybe its one in addition to the other.
The author holds shares of both XLE and XLU at the time of publication.