Although U.S. Energy based equities have pulled back along with the market itself lately, XLE (SPDR Energy Select Sector, Expense Ratio 0.18%) is still notably out-performing the broad market S&P 500 Index in the trailing one month period and year to date.
The sector fund has had some creation activity this week to the tune of about $500 million that appears to be part of a greater sector rotation into defensive type equities.
XLE as we have mentioned in the recent past, is fairly concentrated in a few single names, notably XOM which has a 16.06% weighting and CVX with a 13.07% weighting. SLB the third highest weighted component only has a 7.50% weighting, and then there is a severe drop-off in allocation weightings to the lesser components (i.e. OXY the fourth weighted holding has about a 3.73% weight).
Both XOM and CVX report quarterly earnings results in the near term, in the 5/1-5/2 timeframe. XLE remains the largest U.S. Energy sector specific product in terms of asset size, with about $9.5 billion in AUM, but we should also watch several other products here as market activity in general accelerates on this sell-off and as we approach core earnings season.
VDE (Vanguard Energy, Expense Ratio 0.14%), IYE (iShares U.S. Energy, Expense Ratio 0.48%), OIH (Market Vectors Oil Services, Expense Ratio 0.35%), IXC (iShares S&P Global Energy Sector, Expense Ratio 0.48%), XOP (SPDR S&P Oil & Gas Exploration & Production, Expense Ratio 0.35%), and FXN (First Trust Energy AlphaDEX, Expense Ratio 0.70%) immediately jump out as notables in this sector in terms of overall asset sizes that portfolio managers should watch and consider.
Other funds in the space that may see an uptick in activity include IEZ (iShares U.S. Oil Equipment & Services, Expense Ratio 0.48%), IEO (iShares Oil & Gas Exploration & Production, Expense Ratio 0.48%), XES (SPDR S&P Oil & Gas Equipment & Services, Expense Ratio 0.35%), and PXI (PowerShares DWA Energy Momentum, Expense Ratio 0.65%) to name a few.
Energy Select Sector SPDR
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