We recently mentioned cautious looking flows in XLE (SPDR Energy Select, Expense Ratio 0.18%) options involving put buying, and the ETF took a bit of a hit yesterday after previously trading at a new multi-year high intraday.
The fund has seen more than $300 million vacate lately via redemption activity, but it is not alone in the Energy equity space as profit takers are clearly rushing into the picture before year-end and taking gains for the 2013 tax year.
Related ETFs OIH (Market Vectors Oil Services, Expense Ratio 0.35%) and XOP (SPDR S&P Oil & Gas Exploration & Production, Expense Ratio 0.35%) have also seen some trimming back in positions, with the two funds losing >$200 million and >$136 million recently.
We had mentioned the large cap leaning in XLE previously, with more than 38% of the overall portfolio residing across XOM (17.21% weighting), CVX (14.88%) and SLB (6.31%). All three of these names are slated to report quarterly earnings by the end of January, so there is perhaps some pre-earnings concern in this sector which is causing some to exit positions here as well.
XLE is the largest Energy equity based ETF in the marketplace, with $7.93 billion in overall assets under management currently. Other ETFs that may possibly be in focus here include VDE (Vanguard Energy Index, Expense Ratio 0.14%) and IYE (iShares U.S. Energy Sector Index, Expense Ratio 0.48%), all of which have different make ups compared to each other when it comes down to it.