Traditional, large-cap energy stocks and the exchange traded funds laden with those names are off to a glum start this year.
This is how glum: The S&P 500 energy sector lost 6.3% last month compared to a 6.4% loss for emerging markets, according to S&P Dow Jones Indices Senior Index Analyst Howard Silverblatt. That made energy the worst sector by nearly 40 basis points over consumer discretionary as Exxon (NYSE: XOM) declined 8.9%, Chevron (NYSE: CVX) fell 10.6%, and Occidental Petroleum (NYSE: OXY) fell 7.9%, noted Silverblatt.
Said another way, investors would have been better off last month with the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), which performed better than the 9.75% average loss generated by Exxon Mobil and Chevron. [Dismal January for Emerging Markets ETFs]
To be fair, the Energy Select Sector SPDR Fund (NYSEArca: XLE), Fidelity MSCI Energy Index ETF (NYSEArca: FENY) and the Vanguard Energy ETF (NYSEArca: VDE) were all better than EEM last month, but the stumble for the S&P 500’s sixth-largest sector weight is still noticeable. That is particularly true coming off 2013, a year in which the average return of 26% offered by XLE and VDE lagged the S&P 500 by a wide margin. [Energy ETFs Stumble to Start 2014]
The energy sector’s laggard ways sent XLE from being the third-largest of the nine sector SPDRs to fifth-largest late last year.
While slack oil production growth is seen as the culprit for knocking the aforementioned oil names (and others) lower in January, those stocks and the ETFs mentioned here all performed noticeably worse than the U.S. Oil Fund (NYSEArca: USO).