How Did XLE Perform Compared to Other SPDR ETFs?



Energy sector versus the Market

From June 30–July 7, 2016, the Energy Select Sector SPDR ETF (XLE) fell 2.1%, the most among the SPDR ETFs. Let’s find out how XLE performed compared to other SPDR ETFs.

Crude oil (USL) (SCO) (BNO) fell on July 5, 2016, as Brexit concerns and supply-related fears reemerged. The fall accelerated on July 7 after the EIA’s (U.S. Energy Information Administration) crude oil inventory report. See Part 1 of this series for more on crude oil prices.

However, integrated energy players such as Exxon Mobil (XOM) and Chevron (CVX) returned 1.4% and -0.06%, respectively, from June 30–July 7. This supported XLE. Together, Exxon and Chevron have a weight of 34.8% in XLE.

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The Health Care Select Sector SPDR ETF (XLV) and the Consumer Discretionary Select Sector SPDR ETF (XLY) gained the most. Both rose 1.5% from June 30–July 7. The rally was driven by the defensive stance of investors in the aftermath of the Brexit vote on June 23. Returns of SPDR ETFs are adjusted for dividends.

The above table shows XLE’s performance compared to ETFs representing other sectors.

Oil-weighted stocks

On July 8, 2016, as of 2:06 AM EST, US crude oil was $45.50 per barrel, a decline of 7.1% compared to the closing price on July 1. Crude oil could close on a negative note this week. From June 24 to July 1, crude oil rose 2.8%.

The potential of a reversal in crude oil prices is an important factor for oil-weighted stocks such as RSP Permian (RSPP), Abraxas Petroleum (AXAS), Bill Barrett (BBG), Oasis Petroleum (OAS), and Clayton Williams Energy (CWEI). It also impacts ETFs such as the iShares US Oil Equipment & Services (IEZ), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the Guggenheim S&P 500 Equal Weight Energy ETF (RYE).

In the final part of our series, let’s see why crude oil and natural gas drive energy ETFs.


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