Another issue to consider is that the better seasonal period for the energy sectors ends in mid-May and although oil prices historically rise in the third quarter, the energy sector typically lags in the third quarter.
XLE tracks 32 energy companies from within the S&P 500 Index. Top holdings include well-known names such as Exxon Mobil (XOM), Chevron Corp (CVX), and ConocoPhilips (COP).
“There’s too much uncertainty surrounding the sector right now as well as a lot of volatility in general markets due to geopolitical concerns,” Michael Bapis, partner and managing director at the Bapis Group at HighTower Advisors, said in an interview with CNBC.
Rivals to XLE include the Vanguard Energy ETF (NYSEArca: VDE), iShares U.S. Energy ETF (NYSEArca: IYE) and the Fidelity MSCI Energy Index ETF (NYSEArca: FENY).
For more information on the oil market, visit our energy category.