Core Insights - The Vanguard Energy ETF has outperformed other ETFs, achieving a 30.2% annual return over the last five years, significantly higher than the Vanguard Financials ETF's 20% [4][6] - The ETF's performance is attributed to the recovery of the global economy post-COVID-19, which increased oil demand, although it has been relatively flat over the last three years compared to the S&P 500's 80% gain [6][9] - The ETF is heavily weighted in major companies like ExxonMobil and Chevron, which have low production costs and strong dividend histories, making it an attractive option for passive income [12][15] Performance Context - The Vanguard Energy ETF's impressive returns are contextualized by the low oil prices during the pandemic, which drove significant gains as the economy recovered [5][6] - Current forecasts predict Brent crude oil prices to be around $52 per barrel in 2026, which could pressure margins for oil companies [9][11] - The ETF's performance is influenced by external factors such as geopolitical events and shifts in investor preferences towards dividend and value stocks [10][17] Investment Characteristics - The Vanguard Energy ETF has a low expense ratio of 0.09%, making it a cost-effective way to invest in leading U.S. energy companies [16] - The ETF yields 3.1%, driven by high yields from its largest holdings, which is significantly higher than the S&P 500 average of 1.2% [15][16] - The ETF's price-to-earnings ratio of 16.9 is more attractive compared to the Vanguard S&P 500 ETF's 28.9, appealing to investors concerned about valuations [18]