Many energy ETFs are in negative territory for 2012 and lagging the overall market on oil weaknesss. However, the sector funds are off to a strong start for the back half of the year and are poised to benefit from a rebound in energy prices.
Energy Select Sector SPDR (NYSEArca: XLE) is down about 3% year to date.
The first half of 2012 is history and investors may be tempted to look back at the past performance of ETF winners and losers to help guide future decisions. However, buying low and selling high is the name of the game. Bottom fishers may want to take a look at ETFs tracking energy and international stocks.
“The S&P 500 Index rose 9.5% in the first six months of 2012, while the MSCI EAFE Index was up just 0.8% amid investor’s concerns about sovereign issues in Europe. Sorting through the 391 equity ETFs that invested in the U.S. and currently ranked by S&P Capital IQ, we find that just over a quarter of them (108) outperformed the S&P 500,” Todd Rosenbluth, analyst at S&P Capital IQ, wrote in a recent note.
As Europe’s debt crisis had investors fleeing overseas markets and commodities in the first half of 2012, reports Trang Ho for Investor’s Business Daily, it could be time for investors to take a contrarian stance for the second half of the year.