VDE vs WEEI

VDEAVanguard Energy ETF

WEEIDWestwood Salient Enhanced Energy Income ETF

In short

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.

WEEI Most energy ETFs hand you the sector and stop there. WEEI is the active one: North American energy stocks with covered calls written on top, distributions paid monthly. The options overlay is the whole product, and you pay up for it.

Stated mandate

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.

WEEI The actively managed ETF seeks current income and capital appreciation, investing primarily in equity securities of energy companies and normally at least 80% of net assets in those companies.

Why people hold it

• 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.

• WEEI A rare setup in energy: an active manager picks the stocks, then writes calls against them, with income paid monthly. The big index peers deliver sector beta and nothing more.westwoodgroup.com
• Calls are written only against shares the fund already owns. The premium comes from capping upside on stock it holds, not from borrowed money or naked options.westwoodgroup.com
• Westwood states the call writing is meant to damp volatility and run a lower beta than the S&P Energy Select Sector Index, the yardstick most sector funds hug.westwoodgroup.com
• The active mandate lets managers roam upstream, midstream, downstream, services and integrateds, with at least 80% of net assets in energy companies.westwoodgroup.com

Worth knowing

• 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.

• WEEI At 0.85% a year, one of the priciest tickets in the energy aisle. The cohort median is 0.45%, and index heavyweights XLE and FENY charge 0.08%.
• Covered calls swap upside for premium. When oil and gas names run hard, the shares with calls written on them get capped while plain sector funds keep climbing.westwoodgroup.com
• Westwood notes distributions may include return of capital, which can reduce NAV over time. The fund launched in 2024 and remains small, so the track record is short.westwoodgroup.com

Full VDE profile⁠

Full WEEI profile⁠