Why did XLE decline 12%?

XLE declined due to the collapse of crude oil prices from $124 Brent to the mid-$80s.

What is concentration risk in XLE?

Concentration risk means the fund is heavily dependent on a few large stocks like XOM and CVX, making it more volatile.

How did the Strait of Hormuz closure affect oil prices?

The closure pushed Brent crude to $124.61 in April, but prices later fell as tensions eased.

XLE Concentration Risk Meets Oil's Next Move: June Watch

The XLE fund experienced sharp volatility after the Strait of Hormuz closure, rising to $61.29 then falling 12%. The article discusses concentration risk and the impact of oil price moves on energy stocks.

June 22, 2026

2 min read

Source: 24/7 Wall St.

Key Numbers

XLE peak

61.29

Brent peak

124.61

XLE decline

12%

Brent decline target

mid-80s

The Energy Select Sector SPDR Fund (XLE) has experienced significant volatility over the past two months. It climbed to $61.29 on May 19 after Brent crude touched $124.61 in early April due to the de facto closure of the Strait of Hormuz, then gave back 12% in a month as crude collapsed toward the mid-$80s.

Concentration Risk in XLE

XLE is heavily concentrated in a few large stocks. Its top holdings are Exxon Mobil (XOM) and Chevron (CVX), which together account for over 40% of the fund. This means the fund's performance is highly dependent on these two stocks.

Oil Price Moves and Impact

Brent crude has fallen from $124 to the mid-$80s, negatively impacting energy stocks. If the decline continues, XLE could face further pressure. Conversely, any geopolitical escalation could push prices higher again.

What This Means for Investors

Investors in XLE should be aware of concentration risk. Diversifying across other sectors or broader funds could reduce risk. Monitoring developments in the Strait of Hormuz and oil prices will be crucial in June.

Frequently Asked Questions

XLE is an exchange-traded fund that tracks the energy sector of the S&P 500, including companies like Exxon Mobil and Chevron.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.