Watch out for XLE – begging the question on diversification

Never a fan of XLE – this Spider is heavily concentrated in two Oil Super Majors.

Exxon and Chevron make up about 40% of this ETF.

Exxon is a dud. Chevron is in the fight for Anadarko with Occidental.  There is a risk it will overpay and counterbid.

Although Chevron is a well-managed company, there are better investments with much higher yields.

The other Supermajors like Total, Shell, and BP are yielding above 5% and are strongly positioned in the markets.

The mid-stream companies like EPD, ET, and MMP are all doing great given the price differential between WTI Crude and Brent.