XLE, VDE: 2 Energy ETFs with Room for Upside, According to Analysts

Investing in energy ETFs (exchange-traded funds) is a cost-convenient way to gain exposure to the sector. Today, we have leveraged the TipRanks ETF Screener to scan for two energy sector ETFs with more than 10% upside potential projected by analysts: Energy Select Sector SPDR Fund (XLE) and Vanguard Energy ETF (VDE).

Let’s take a closer look at what Wall Street thinks about these two ETFs.

Energy Select Sector SPDR Fund (XLE)

The XLE ETF seeks to provide an effective representation of the energy sector of the S&P 500 Index (SPX). The ETF provides exposure to companies in the oil, gas, and consumable fuel, energy equipment, and services industries. XLE has $38.36 billion in assets under management (AUM), and its expense ratio stands at 0.09%. Interestingly, the XLE ETF has gained 11.29% so far this year.

Turning to Wall Street, XLE ETF has a Moderate Buy consensus rating based on 21 Buys and three Holds assigned in the last three months. At $103.45, the average XLE ETF price target implies a 12.91% upside potential.

Vanguard Energy ETF (VDE)

The Vanguard Energy ETF aims to track the performance of the MSCI U.S. Investable Market Energy 25/50 (MSCI 25/50) Index, which measures the investment return of stocks in the energy sector. VDE has $8.25 billion in AUM. Meanwhile, the ETF’s low expense ratio of 0.1% is encouraging. The VDE ETF has generated a return of 11% year-to-date.

Overall, the VDE ETF has a Moderate Buy consensus rating based on 85 Buys, 26 Holds, and two Sells assigned in the last three months. At $147.82, the average VDE ETF price target implies a 15.7% upside potential.

Concluding Thoughts

Energy ETFs can be valuable additions to an investment portfolio, offering diversification and cost-effective exposure to the cyclical industry. Given the upside potential projected by analysts, VDE and XLE ETFs are worth considering by investors.

Disclosure