Is MLPX or XLE the Superior Energy ETF For Investors in 2026?

Choosing between Global X - MLP & Energy Infrastructure ETF (NYSEMKT:MLPX) and State Street Energy Select Sector SPDR ETF (NYSEMKT:XLE) involves weighing the income-rich midstream infrastructure sector against the broader energy giants of the S&P 500.

Investors seeking energy exposure often use these funds to target different segments of the value chain. While MLPX specializes in the storage and transportation of energy through master limited partnerships, XLE provides liquid, low-cost access to integrated oil and gas companies that dominate the domestic market.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on July 20th.

Expense ratios favor the SPDR ETF significantly, as it charges 0.08% compared to the 0.45% fee for the Global X fund. However, MLPX offers a higher payout, providing a yield premium of roughly 1.40 percentage points.

Performance & risk comparison

What's inside

The State Street Energy Select Sector SPDR ETF holds 21 positions and provides 100% exposure to the energy sector. Its largest positions include ExxonMobil Holdings Corp (NYSE:XOM) at 20.3%, Chevron Corp (NYSE:CVX) at 14.4%, and ConocoPhillips (NYSE:COP) at 5.9%. This fund was launched in 1998. State Street Energy Select Sector SPDR ETF has paid $1.52 per share over the trailing 12 months, which on its recent ~$58 share price works out to a 2.60% yield.

The Global X - MLP & Energy Infrastructure ETF contains 29 holdings, focusing on midstream entities with 99% energy and minor utility allocations. Its top holdings include TC Energy Corp (NYSE:TRP) at 9%, Enbridge (NYSE:ENB) at 8.9%, and Williams Cos (NYSE:WMB) at 8.9%. It was launched in 2013. Global X - MLP & Energy Infrastructure ETF has paid $3.04 per share over the trailing 12 months, which on its recent ~$76 share price works out to a 4.00% yield.

Which fund is the better buy?

Both ETFs provide concentrated exposure to the U.S. energy market, but they have key differences investors need to weigh before investing.

The Global X - MLP & Energy Infrastructure ETF — MLPX — focuses on the midstream portion of the energy business. Midstream businesses, such as pipelines, tend to be less volatile because they are less exposed to energy price fluctuations — usually the oil or gas is still going to be transported from point A to point B, netting MLPs their transmission fees.

Unlike traditional MLP funds, MLPX avoids fund-level taxes by limiting direct MLP exposure and by investing in similar entities, such as MLP general partners and other energy infrastructure corporations. That’s a plus for investors, since funds that hold MLPs can incur additional taxes for investors, even if they are simpler than directly investing in MLP stocks.

Over time, the Global X fund shows its chops. MLPX has returned 27.1%, 21.2%, and 12% over the 3-year, 5-year, and 10-year periods. That beats XLE in each period.

XLE, meanwhile, because it doesn’t invest in MLPs, is focused primarily on companies on either end of the energy market spectrum, producers and retailers. That means the oil price increase due to the Iran war has been benefiting XLE’s portfolio more strongly. XLE beats MLPX 29.3% to 22.9% over the past 52 weeks. But XLE’s 3, 5-, and 10-year annualized returns of 13%, 18.8%, and 8.9%, respectively, fall short of MLPX’s performance.

The superior long term performance of MLPX and good dividend yield more than make up for its higher expense ratio compared to XLE.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Enbridge. The Motley Fool recommends ConocoPhillips and Tc Energy. The Motley Fool has a disclosure policy.