Energy Select Sector ETF Logs $4 Billion Inflows as Oil Rallies $10
XLE has returned 29% over the past year, narrowly outpacing DRLL’s 27.5% gain despite DRLL’s purer upstream oil exposure. Recent Middle East tensions drove oil prices up by over $10/barrel and attracted $4 billion in inflows into XLE during the first two months of 2026.
1. Yearly Performance Comparison
Over the past year, Energy Select Sector ETF delivered a 29% total return, slightly outpacing Strive U.S. Energy ETF’s 27.5% gain despite DRLL’s narrower focus on upstream producers. XLE’s broader exposure to midstream and services has moderated volatility while still capturing crude price rallies.
2. Inflows Driven by Geopolitical Tensions
Since January, XLE has attracted $4 billion in net inflows after three years of redemptions as oil prices jumped over $10 per barrel on renewed Middle East tensions. This capital shift underscores investor demand for energy equities as a hedge against potential supply disruptions and inflationary pressures.
3. Portfolio Composition and Oil Sensitivity
The ETF’s top holdings—Exxon Mobil and Chevron—together account for approximately 18% of the fund, amplifying sensitivity to fluctuations in integrated oil major earnings. Continued volatility in WTI crude prices could drive disproportionate swings in XLE’s NAV given its concentration in large-cap producers.