The energy sector has been one of the best areas in the market for both growth and value investors to allocate capital over the last several years. OPEC has recently upgraded its 2045 oil demand forecast to 116 million barrels per day, representing a 6 million barrels per day increase from last year. OPEC expects global oil demand to increase by 16 million barrels per day in the period from 2022 to 2045.

Geopolitical risk, a restricted supply, and robust demand are all factors that suggest crude oil prices will remain elevated for the time being. As a consequence, the energy sector is a wise choice for investors seeking secure capital gains and a steady income. For the last several years, the energy sector has been one of the top performers in the stock market, providing opportunities for both growth and value investors to allocate their resources. Between 2016 and 2020, most oil and gas stocks struggled to keep up with the benchmarks, despite the fact that many oil and gas companies were inexpensive prior to the recent surge in energy prices. The Most oil and gas stocks consistently and significantly underperformed the benchmarks between 2016 and 2020, many oil and gas companies were cheap prior to the run-up in energy prices over the last three years. One of the most well-known energy funds among them is exactly the Energy Select Sector SPDR Fund (XLE).

Since October 2020, Energy Select Sector SPDR Fund has proven to be one of the most high-performing ETFs with a total return of 232.34%. The concentration of the fund lies predominantly in ExxonMobil (XOM) and Chevron (CVX), both of which have been leading performers within the realm of oil and gas stocks. Interestingly, over the past 10 years, another prominent oil fund, USO, has underperformed XLE with an annualized return of -12.08%, while XLE has yielded a comparatively higher 3.52% annualized return.

Over the course of the past several years, this ETF has established itself as one of the most successful in the market. Its performance has been exceptional, earning it a reputation as one of the top-performing ETFs available for investment.