Drilling for an Oil and Gas ETF

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

The energy market is facing what is popularly called a “Catch-22.”

While the worldwide desire to shift to cleaner sources of energy to preserve the standard of living that people have grown accustomed to has put pressure on energy stocks, the global supply-chain shortage caused by Russia’s war against Ukraine and new outbreaks of COVID-19 around the world have sent energy stocks still higher. As a result of this paradox, investors will likely remain interested in energy companies for the foreseeable future.

While many exchange-traded funds (ETFs) in the oil and gas sector focus on futures contracts or companies that provide the equipment and services that are needed for the oil and gas fields to operate, others focus on the exploration and production that is necessary to bring “black gold” out of the ground. One such ETF is the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP).

Specifically, XOP tracks an equally weighted index, namely the S&P Total Market Index, in the U.S. oil and gas production space and includes companies that engage in the exploration, refining and marketing parts of the oil and gas production process. While the fund’s weighting strategy avoids overexposure to the big-name stocks in the field, the flip side of this decision is that the fund favors mid-cap and small-cap stocks.

Currently, the fund’s top holdings include EQT Corporation (NYSE: EQT), Southwestern Energy (NYSE: SWN), Antero Resources Corp. (NYSE: AR), Hess Corporation (NYSE: HES), Range Resources Corp. (NYSE: RRC), CNX Resources (NYSE: CNX), Centennial Resource Development Inc. (NASDAQ: CDEV) and Coterra Energy Inc. (NYSE: CTRA)

As of April 13, XOP has been up 10.39% over the past month and up 27.01% for the past three months. It is currently up 45.46% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $5.64 billion in assets under management and has an expense ratio of 0.35%.

While XOP does provide an investor with a way to profit from oil and gas companies, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Exclusive  Predict the Wave of the Future with This Quantum ETF
share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor