DoubeLine Capital CEO Jeff Gundlach may be better known for his fixed-income plays, but he is currently looking at commodities as a great market play, singling out an oil and gas exploration and production exchange traded fund.

At the Sohn Investment Conference, Gundlach argued that the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) is an underappreciated opportunity in the energy space, contending that energy stocks have not fully priced in the crude-oil rally, reports Eric Rosenbaum for CNBC.

“It’s lagged in a way that’s kind of bizarre this year,” Gundlach told CNBC. “It’s not a very great performing sector, and yet oil has gone up towards $70 a barrel.”

XOP is up 5.4% year-to-date and 12.4% over the past year. The S&P 500 gained 0.5% year-to-date and is up 16.0% over the past year. Meanwhile, West Texas Crude oil increased 25% in the past year.

“If you look historically at the energy sector versus the S&P 500, not surprisingly it’s correlated with movements in oil. That hasn’t happened this time, and I think there’s a catch-up there. The charts look good on XOP, the exploration and production part of the sector,” Gundlach added.

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