XOP vs. EMLP: Should You Buy a Low-Cost Oil Fund or Higher-Yield Infrastructure ETF?

The State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP +1.09%) offers low-cost, targeted upstream energy exposure, whereas the First Trust North American Energy Infrastructure Fund (EMLP +0.68%) provides a higher-yielding, utility-heavy infrastructure play.

Energy investors often distinguish between upstream producers and the toll-booth business models of midstream infrastructure. While XOP targets drillers and refiners, EMLP focuses on the pipelines and utilities that move and process energy. This comparison looks at how these distinct mandates affect performance, cost, and income.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on Aug. 10.

The State Street fund is significantly more affordable, carrying an expense ratio of 0.35% compared to 0.95% for the First Trust fund. However, income-focused investors may prefer the First Trust fund, which offers a higher 2.8% yield.

Performance & risk comparison

What’s inside

The First Trust North American Energy Infrastructure Fund allocates its assets across multiple sectors, including Energy at 48%, Utilities at 46%, and Industrials at 5%. Its largest positions include Enterprise Products Partners (EPD +0.08%) at 8.8%, and Energy Transfer LP (ET +2.29%) at 7.7%, and a money market fund from Morgan Stanley (MS -0.30%) that is effectively a cash position, at 7.4%, across 57 holdings. Even though it is mainly a fossil fuels-focused fund, it fund incorporates an ESG screen. The fund was launched in 2012. First Trust North American Energy Infrastructure Fund has paid $1.21 per share over the trailing 12 months, which on its recent ~$43.52 share price works out to a 2.8% yield.

The State Street SPDR S&P Oil & Gas Exploration & Production ETF focuses on traditional energy, with its portfolio leaning heavily into energy companies at 95% and basic materials at 4%, with less than 1% in technology (percentages are rounded). It contains 51 holdings and follows a modified equal-weighted index, which prevents any single company from dominating the fund. Its largest positions include PBF Energy Inc Class A (PBF+0.17%) at 4%, Par Pacific Holdings Inc (PARR-1.90%) at 3.5%, and Delek U.S.Holdings Inc (DK+1.50%) at 3.3%. The fund was launched in 2006. State Street SPDR S&P Oil & Gas Exploration & Production ETF has paid $3.25 per share over the trailing 12 months, which on its recent ~$175.93 share price works out to a 1.8% yield.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buy?

Oil prices are making for a great year for fossil fuel investors. The price of Brent oil, the benchmark for global crude, nearly doubled from its late 2025 price after the U.S. attacked Iran. While oil prices have eased off a bit, they are about 50% higher now than they were in late 2025. That means big oil is reaping big profits. For XOP, which is all invested in U.S.-traded companies, that is especially true because U.S. oil giants are benefiting from bloated oil prices despite having little direct exposure to the war. Basically, oil companies are making more money while having almost no rise in their costs.

The spike in oil prices from the Iran war is seen in XOP’s year-to-date gains of almost 42%. Yet a normal oil market doesn’t seem to have been a great market for XOP. Take away 2026, and XOP investors largely started 2025 where they started 2015, price-wise (dividends paid does mean shareholders benefited more than simple ETF price).

Turning to EMLP, its holdings are primarily master limited partnerships — MLPs. These are a common structure for midstream oil and gas businesses. The structure means that MLPs don’t pay taxes, instead handing the tax bill to investors who receive distributions. Investing directly means handling K-1 forms for each MLP, which is a time-consuming and sometimes confusing tax-time hassle.

The EMLP ETF simplifies investing in MLPs by handling the accounting and sending shareholders a single 1099 for tax filing. But midstream companies haven’t benefited from the oil price spike since their capacity is largely contracted out ahead of time, and pricing tends to be based on volume, not commodity price. EMLP’s year-to-date return, therefore, is a much less impressive (but still good) 17.8%. The steady nature of midstream businesses shows in the long-term returns, however. EMLP has a 10-year annualized return of 10% compared to 4.6% for XOP.

For a long-term investor, the slow and steady work of EMLP is the better approach than trying to catch lightning in a bottle with XOP.