USAI vs VDE

USAIDPacer American Energy Infrastructure ETF

VDEAVanguard Energy ETF

In short

USAI Skip the drillers. USAI owns the toll-booth end of energy: the pipelines, storage and processing assets that move hydrocarbons across the US and Canada, roughly 40 names, with cash paid out monthly.

VDE Energy without the mega-cap tunnel vision. VDE tracks an index of roughly 110 US energy stocks, large down to small cap, for 0.09% a year, and it has been running since 2004.

Stated mandate

USAI The Fund seeks to track, before fees and expenses, the performance of the American Energy Infrastructure Index through a passive indexing strategy.

VDE The fund seeks to track the MSCI US Investable Market Energy 25/50 Index, which represents large-, mid-, and small-cap U.S. energy-sector stocks.

Why people hold it

• USAI Infrastructure, not exploration. The index targets the midstream assets that get paid to move and store energy, a different business than pumping it out of the ground.
• The mandate reaches into Canada as well as the US, so it picks up the big Canadian pipeline operators that US-only energy funds leave out.paceretfs.com
• Pays monthly, and it is a 1940 Act registered fund rather than a partnership, which sidesteps the K-1 paperwork attached to partnership-structured MLP vehicles.
• Rules-based and passive: it tracks the American Energy Infrastructure Index rather than leaving pipeline picks to a manager's judgment.

• VDE Costs 0.09% a year, a fraction of what the typical energy sector fund charges.
• Casts a wider net than mega-cap-only energy funds: about 110 large-, mid- and small-cap US names, from the integrated majors to shale drillers and refiners.vanguard.com
• Hugs its benchmark closely and trades actively, which tends to keep spreads slim for everyday buys and sells.
• Live since 2004 and one of the strongest builds in the broad energy group, with a Vanguard fee structure that has only ratcheted downward.

Worth knowing

• USAI At 0.75% a year, it costs well above the 0.45% typical for energy funds, and broad options like XLE and FENY run 0.08%. Narrow exposure carries a real price tag here.
• Thinly traded. Volume is light next to the big energy ETFs, so bid-ask spreads can widen, especially on large or fast orders.
• About 40 holdings in one slice of one sector. Pipeline economics, regulation and commodity swings drive the whole basket together.

• VDE One sector, one storyline: this rides crude and natural gas prices, and it swings harder in both directions than a total-market fund.
• Cap-weighted, so a handful of US oil majors carry outsized weight despite the long holdings list; the index's 25/50 rules limit that concentration rather than erase it.vanguard.com
• Income arrives quarterly, not monthly, and moves with what energy companies choose to pay out.

Full USAI profile⁠

Full VDE profile⁠