It is not a stretch to say that investors have recently heard plenty about oil’s rally and the subsequent durability in the energy sector. After sliding nearly 9% last year, the Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, is up 5.1% this year making it the fourth-best of the nine sector SPDRs.
Some other ETFs holding oil stocks have delivered even more impressive performances. As we have noted several times since the end of last year, ETFs with robust exposure to oil refiners would likely lead the way if a bounce in energy equities were to materialize. That bounce has materialized, helping make leaders of refiners-heavy funds such as the PowerShares Dynamic Energy Exploration & Production Portfolio (NYSEArca: PXE) and the PowerShares DWA Energy Momentum Portfolio (NYSEArca: PXI).
PXE and PXI, both of which are smart beta ETFs, entered Tuesday with year-to-date gains of 14.8% and 10.6%, respectively. With analysts applying bullish outlooks to some of those ETFs’ marquee holdings, PXE and PXI may not be done delivering for investors in 2015. [Why These Energy ETFs Impress]
In a note out yesterday, posted by Barron’s, Credit Suisse boosted its price target on Marathon Petroleum to $140 from $130, well above the $101.50 area at which the shares currently reside. Creditu Suisse is also bullish on Phillips 66 (NYSE: PSX).
“Phillips 66 is in a robust position to deliver more than $9 billion of longer-term mid-cycle Ebitda. With $5 billion of cash on hand and Phillips 66 Partners LP ability to self-fund, the strong growth in mid-cycle Ebitda at Phillips 66 seems mainly a question of delivery,” according to Credit Suisse.
The $183.1 million PXI features Marathon Petroleum and Phillips 66 as its eighth- and ninth-largest holdings, respectively. The pair combine for almost 6.2% of the ETF’s weight.