Energy ETF (VDE) Hits New 52-Week High

Vanguard Energy Index Fund ETF Shares VDE is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and has moved up 65.38% from its 52-week low price of $103.07 per share.

Are more gains in store for this ETF? Let us take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed.

VDE in Focus

The underlying MSCI US Investable Market Index (IMI)/Energy 25/50 is made up of stocks of large, mid-size and small U.S. companies within the energy sector. The product charges 0.09% in annual fees (see: all Energy ETFs).

Why the Move?

The energy sector has been an area to watch, given the increase in oil prices due to the ongoing conflict in the Middle East. Damage to critical energy infrastructure in the region, which is restricting near-term production capacity, along with the closure of the Strait of Hormuz, causing supply disruptions, is likely to keep oil prices higher for longer than expected.

Additionally, prolonged tensions in the Middle East suggest that oil markets could remain structurally tight, keeping long-term oil prices elevated well beyond the resolution of the conflict.

More Gains Ahead?

Currently, VDE has a Zacks ETF Rank #2 (Buy) with a High risk outlook. It might continue its strong performance in the near term, with a positive weighted alpha of 44.94 (per Barchart.com), which hints at a rally.

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Vanguard Energy Index Fund ETF Shares (VDE): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research