Better Energy ETF: VanEck's Nuclear-Focused NLR vs. State Street's XOP Oil and Gas Fund
Key Points
The VanEck Uranium and Nuclear ETF carries a greater expense ratio but offers a higher trailing dividend yield than the State Street SPDR S&P Oil & Gas Exploration and Production ETF.
The State Street SPDR S&P Oil & Gas Exploration and Production ETF is nearly entirely focused on the energy sector, while the VanEck Uranium and Nuclear ETF maintains a 29% allocation to utilities.
The State Street SPDR S&P Oil & Gas Exploration and Production ETF significantly outperformed on a 1-year total return basis, although both funds delivered comparable growth over a five-year period.
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The State Street SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) provides broad, equal-weighted exposure to fossil fuel extractors, while the VanEck Uranium and Nuclear ETF (NYSEMKT:NLR) targets nuclear power generation and uranium miners.
Investors choosing between these funds are essentially weighing different segments of the energy landscape. While the State Street fund focuses on traditional fossil fuel exploration and refining, the VanEck fund tracks the global nuclear fuel cycle and nuclear-derived electricity. Both are liquid, established options for investors seeking targeted energy thematic exposure. Subsequent mentions will refer to these as the State Street fund and the VanEck fund.
Snapshot (cost & size)
| Metric | XOP | NLR |
|---|---|---|
| Issuer | State Street | VanEck |
| Share price | $187.44 (as of 2026-10-05) | $103.73 (as of 2026-10-05) |
| Expense ratio | 0.35% | 0.52% |
| 1-yr return (as of 2026-10-05) | 43.6% | (24.8%) |
| Dividend yield | 1.7% | 3.1% |
| Beta | 0.64 | 1.54 |
| AUM | $3.6 billion | $3.6 billion |
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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The State Street fund is more affordable with an expense ratio of 0.35%, whereas the VanEck fund charges 0.52%. However, the VanEck fund currently provides a significantly higher payout for income-seeking investors, with a yield gap of 1.39 percentage points.
Performance & risk comparison
| Metric | XOP | NLR |
|---|---|---|
| Max drawdown (5 yr) | (45.6%) | (37.5%) |
| Growth of $1,000 over 5 years (total return) | $1,818 | $1,907 |
What's inside
The VanEck Uranium and Nuclear ETF concentrates on a narrow group of 29 holdings, primarily utilities and uranium miners. Its largest positions include Constellation Energy Corp (NASDAQ:CEG) at 8.31%, Cameco Corp (NYSE:CCJ) at 8.05%, and Public Service Enterprise Group Inc (NYSE:PEG) at 7.78%. The portfolio provides significant exposure to the utilities sector at 29% and industrials at 16%, with the remaining 53% in energy. It was launched in 2007, and has paid $3.17 per share over the trailing 12 months, which on its recent ~$103.7 share price works out to a 3.1% yield.
By contrast, the State Street SPDR S&P Oil & Gas Exploration & Production ETF uses a modified equal-weighted approach across 51 holdings, which reduces individual stock concentration. Its largest positions include Marathon Petroleum Corp (NYSE:MPC) at 2.95%, PBF Energy Inc (NYSE:PBF) at 2.94%, and HF Sinclair Corp (NYSE:DINO) at 2.92%. The fund is almost entirely dedicated to the energy sector at 96%, with a minor 3% tilt toward basic materials. It was launched in 2006, and has paid $3.12 per share over the trailing 12 months, which on its recent ~$187.4 share price works out to a 1.7% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Investors seeking exposure to the energy sector have two distinct choices in the VanEck Uranium and Nuclear ETF (NLR) and State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
The VanEck fund offers potential outsized growth as the artificial intelligence boom has led to incredible demand for electricity, and many tech companies seek to transition away from fossil fuels to clean energy. Its superior dividend yield is a selling point, but its higher beta points to greater volatility. This is illustrated in NLR's one-year return contrasted against its solid five-year growth.
You will need a high risk tolerance to invest in the VanEck fund, but while the State Street ETF provides a more tame beta, its holdings are sensitive to crude oil and natural gas prices. This has helped its one-year return due to the U.S. conflict in the Middle East causing oil prices to spike, but the fund's performance can fall when prices drop.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cameco and Constellation Energy. The Motley Fool has a disclosure policy.
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