Back on May 10th we highlighted flagging performance coupled with asset outflows in a popular Energy Services equity ETF, SPDR Energy Select (NYSEArca: XLE).
Since then, the ETF has fallen an additional 9% but we have actually seen sizable asset inflows in recent sessions, despite the negative price action in the sector product.
XLE, currently trading at price levels not seen since last October, has experienced nearly $1 billion in net creations in the past few trading sessions.
Since the larger outflows last time around preceded a significant leg down in terms of price, we are paying attention to these recent inflows.
Not only have energy services related equities sold off sharply recently (XLE down 9.22% in the past month and down 10.31% YTD), but so has Crude Oil the commodity itself recently as it is also trading at multi-month lows.
Currently, top holdings of XLE are large cap names that most everyone is familiar with (XOM, 18.85% weighting, CVX, 14.77% weighting, SLB, 7.08% weighting), and there are a number of other related sector ETFs in this space that we would expect will see heavier than average activity as assets are clearly in motion at this juncture.
Included are VDE (Vanguard Energy), IYE (iShares DJ U.S. Energy Sector), PXI (PowerShares Dynamic Energy Sector), RYE (Guggenheim S&P 500 Equal Weight Energy), FXN (First Trust Energy AlphaDEX) and FEG (FocusShares Morningstar Energy).
In this group are a variety of different index approaches, ranging from market capitalization weighting schemes, fundamental/quantitative approaches, as well as equal weighted indexing. Year to date, the returns in these funds look like the following: PXI -7.96%, XLE -10.31%, IYE -10.33%, FEG -10.52%, RYE -12.06%, FXN -14.50%.
SPDR Energy Select
For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.
