“What you want to take away from this is not only a bearish bias in underperforming commodities towards the end of the year, but also the late holiday gift it leaves,” Bill Baruch of iiTrader said in the article.
Moreover, Baruch argues that the sold off assets may also experience a “bullish bias to start the year” as fund managers reallocate into underperforming assets. [Why This Energy ETF Could Surprise]
Jeff Saut of Raymond James believes that investors could take advantage of the oil wekaness with midstream master limited partnerships during the tax-loss selling season. Additionally, Stoltzfus points to downstream oil companies, or firms that process and sell oil and gas products, such as Chevron (NYSE: CVX) and Valero (NYSE: VLO).
ETF investors can choose from a number of broad MLP-related ETFs. For instance, the JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) and the Alerian MLP ETF (NYSEArca: AMLP) are the two largest MLP-related exchange traded products on the market. AMJ tracks the Alerian MLP Index, which includes 50 of the largest MLPs, while AMLP tracks the Alerian MLP Infrastructure Index, which includes 25 pipeline and processing MLPs. [How MLP ETFs Work]
Broad market capitalization-weighted energy ETFs include a heavy position in Chevron. XLE has a 13.4% position in CVX, along with a 2.3% tilt toward VLO.
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