Investing in exchange-traded funds (ETFs) that track the Nasdaq-100 has historically been a good way to generate market-beating returns. The Invesco QQQ Trust (NASDAQ:QQQ) is one such option, and in five years it has risen by around 90%, while the S&P 500 is up by over 70% during the same time frame.
This year, the ETF is up around 16% and is beating the broad index once again. However, there's been an even hotter group of stocks to own this year, outside of tech, and that's been in the energy sector, with oil prices rising higher due to inflation and the ongoing conflict in the Middle East.
The State Street Energy Select Sector SPDR ETF (NYSE Arca:XLE) is up around 44%. Energy stocks can do particularly well when inflation is hot. Back in 2022, when the markets tanked, the XLE ETF also had a terrific performance, rising by nearly 58%.
For investors seeking safety at a time of adversity, turning to energy stocks can be a good way to reduce risk while still generating strong returns and dividend income. With the State Street Energy Select Sector SPDR ETF, investors gain exposure to the energy sector of the S&P 500 index, featuring leading oil and gas companies such as Exxon Mobil, Chevron, ConocoPhillips, and many others.
The ETF has a low expense ratio of just 0.08% and its yield of 2.4% is above average, giving investors a good way to pad their overall gains.
While the fund has done exceptionally well this year, it can still make for a good long-term investment to hang on to.
