On a year-to-date basis, investors have been loyal to XLE in spite of the ETF’s many trials and tribulations. Investors have poured nearly $1.1 billion into the ETF this year. While XLE has continued slumping in the second quarter, investors have allocated nearly $154.1 million to fund during that period.
Some analysts believe the energy sector can deliver upside for investors later this year. Energy is one of a small amount of sectors that still trades at a noticeable discount relative to long-term averages. Additionally, the energy sector is usually among one of the largest sector weights in value ETFs, underscoring the point that the group is attractively valued relative to some defensive sectors, which trade at lofty multiples.
“Despite promises of lowering production and inventory, we haven’t seen those come to fruition,” said S&P Global portfolio manager Erin Gibbs in an interview with CNBC. “I’m watching if the energy sector can remain stable despite oil dropping below 45 dollars.”
For more information on the oil market, visit our oil category.