Investors are looking for the best ETFs to take advantage of potential gains. Donald Trump has signaled a return to an aggressive oil policy.
Trump is known for his support of oil and gas. His recent remarks, such as his vow to expand oil production if elected, have confirmed his dedication to this cause.
Trump’s oil-friendly stance during his first term in office led to an increase in production of both gas and crude oil. As he campaigned for his potential return to office, investors are left with a clear question: which energy ETF will benefit most from an expanded Trump administration?
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Energy Select Sector ETF SPDR (r) Fund (NYSEARCA : XLE) is a great option.
The low-cost ETF’s returns have been impressive, with a climb of over 300% from the lows.
XLE is a great choice for those investors who want to take advantage of Trump’s oil-friendly agenda.
Trump’s oil interests
It is not lost on anyone that the Trump Administration’s focus on energy independence, including deregulated oil drilling and a relaxation of environmental restrictions has been noticed.
If Trump becomes president, it is best to stay away from stocks that are related to the environment.
Anthony Termini is an experienced investor. He says: “In May of 2024 Donald Trump said to a group of oil executives that he was going to expand drilling in Alaskan Arctic and the Gulf of Mexico.”
These will bring major benefits to the industry, and they support an investment strategy that focuses on drilling.
Termini’s not the only one who has promised a massive oil and gas exploration under a Trump second term. The fear of environment activists and Electric Vehicle manufacturers shows that Trump really means what he promises.
What is the Trump ETF XLE?
Jared Blikre of Yahoo Finance, a stats expert, says that geopolitical uncertainties and imbalances in supply and demand affect the performance of energy shares. He claims the S&P Energy Select ETF dropped by 56% during Trump’s tenure as president due to a drop in demand for oil in the wake of the Pandemic.
XLE, on the other hand soared a staggering 218% when Biden was elected. Profits of major corporations soared after the Russian invasion of Ukraine sparked a surge in crude futures.
Matt Stephani of Cavanal Hill Investment Management says that under a Trump administration, costs could decrease for businesses, potentially boosting profitability. XLE stands to gain directly from higher dividends.
XLE includes the best dividend-paying energy stocks. Exxon Mobil, Chevron and Occidental Petroleum are all stocks that have been backed by Warren Buffett. Other midstream firms like Williams Companies (WMB), ONEOK and Marathon Petroleum also offer relatively high returns.
ETFs are a great way to take advantage of the free cash flow boom that is currently taking place in the Energy sector.
The post Will XLE be able to shine in a Trump administration despite pro-oil policy? This post may change as new information becomes available
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