With low oil prices weighing on the energy sector, investors may turn to a relatively new ex-sector exchange traded fund to track U.S. equities while excluding exposure to weaker energy companies.
Many are utilizing S&P 500 ETFs, such as the SPDR S&P 500 ETF (NYSEarca: SPY), which includes a 7.0% tilt toward energy companies, as a core position for U.S. equities exposure in a diversified investment portfolio.
Looking ahead, the S&P 500 is expected to experience an estimated earnings decline of -3.6% and an estimated revenue drop of 3.1% over the fourth quarter, John Butters, Senior Earnings Analyst at FactSet Insight, said in a research note.
Additionally, for the current year 2015, the estimated earnings decline is -0.3% and estimated revenue drop is -3.4%.
Butters, though, pointed out that the energy sector is projected to be the largest contributor to the estimated earnings and revenue decline for the fourth quarter and for all of 2015. For Q4 2015, the estimated drop in energy sector is -64.3% while estimated revenue decline is -34.2%. For the current year 2015, the estimated earnings decline is -58.5% and estimated revenue decline is -34.4%.
Weighing on the energy sector, crude oil prices have plunged to about $40 per barrel since trading above $100 per barrel last year. The ongoing global supply glut has kept oil prices from breaking higher. [Key Levels to Watch With Oil, Crude ETFs]