Which Is the Better Energy ETF for the AI Era: State Street's XLE or VanEck's Nuclear NLR?
2026-07-21 17:18
•Sara Appino •The Motley Fool
•••••••• ••••• Axe Capital view
XLE vs NLR: Energy Bets in an AI-Driven World
XLE’s oil and gas exposure outperforms NLR’s nuclear focus, but each serves a different investor time frame.
The one-year 39% return from State Street’s XLE ETF is hard to ignore, especially given its rock-bottom 0.08% expense ratio and massive liquidity. It benefits directly from today’s elevated oil prices, amplified by geopolitical tensions in the Middle East. For South African investors, this means exposure to global energy majors like Chevron (CVX) with tangible impacts on USD/ZAR, which often tightens on stronger commodity prices. VanEck’s NLR, meanwhile, stumbles with an 8% loss despite a neat long-term narrative: nuclear power’s role in powering the AI data centers of tomorrow. While uranium prices are soft for now, nuclear’s structural growth could kick in years from now—but patience is key. NLR's higher fees and current weakness make it a tougher sell to a Rand-based investor chasing near-term gains. If your horizon is short to medium term, XLE is the simpler, cleaner, and cheaper play—though nuclear’s promise is not yet priced in. this is just my opinion and not financial advice
Buy XLE for near-term energy exposure tied to oil price strength and liquidity. Watch NLR as a long-term illiquid play but avoid adding if you need returns soon.
- XLE
- NLR
- USD/ZAR
- Oil prices could fall sharply if geopolitical tensions ease
- Nuclear power adoption might stall longer than expected, impacting NLR returns
6/10
State Street's XLE energy ETF delivered 39% returns over one year with a 0.08% expense ratio, significantly outperforming VanEck's NLR nuclear-focused ETF which posted an 8.1% loss. While XLE offers lower costs and higher liquidity through exposure to oil and gas giants, NLR provides a longer-term bet on nuclear power's role in powering AI data centers, despite near-term headwinds from uranium price pullbacks.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Sara Appino
Categories: Rates, Equities, Capital Returns, Commodities, Geopolitics, Technology, AI, Semiconductors
Tickers: XLE, NLR, CVX, CEG, CCJ
Sentiment: Positive - Delivered exceptional 39% one-year returns, offers lowest expense ratio at 0.08%, massive liquidity with $38.3B AUM, and benefits from current oil price strength driven by Middle East conflict. Positioned as the obvious choice for near-term energy exposure. Posted 8.1% loss over one year despite strong long-term nuclear narrative for AI power demands. Higher expense ratio (0.52%) and recent underperformance, but positioned as a patient, longer-term bet on nuclear's structural growth phase with slightly higher dividend yield (2.90%).
Keywords: energy ETF, nuclear power, uranium mining, AI data centers, fossil fuels, expense ratio, dividend yield, commodity prices
Insights:
- XLE: Positive: Delivered exceptional 39% one-year returns, offers lowest expense ratio at 0.08%, massive liquidity with $38.3B AUM, and benefits from current oil price strength driven by Middle East conflict. Positioned as the obvious choice for near-term energy exposure.
- NLR: Neutral: Posted 8.1% loss over one year despite strong long-term nuclear narrative for AI power demands. Higher expense ratio (0.52%) and recent underperformance, but positioned as a patient, longer-term bet on nuclear's structural growth phase with slightly higher dividend yield (2.90%).
- CVX: Positive: Second-largest holding in XLE at 15.01%, benefits from current commodity strength and oil price elevation.
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