The Energy Select Sector SPDR Fund ETF (NYSEARCA:XLE), which tracks the S&P 500 energy sector, rose about 10.2% in the first quarter of 2024, almost similar to the performance of the broader S&P 500 index, which increased by 10.7% during the same period.
The ETF had fallen 0.7% in 2023, while the benchmark index rose 24.7% for the same period.
Crude oil futures risen 12.5% while the energy index rose 10.1% till date.
The index, composed of companies that are into oil production, drilling, refining, and transportation, is the top-performer among the S&P 500 sectors in the past 1 month and ranks third YTD.
Within energy, Energy Equipment & Services rose 4.1%, while Oil, Gas & Consumable Fuels rose 10.7% till date.
XLE has $39.44 billion in assets under management as of March 28, 2024, and among its largest components are ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (COP), SLB (SLB) and EOG Resources (EOG).
U.S. stock fund flows into and out of the energy sector have been in the red for the first 7 weeks of 2023. The energy-focused ETF had a net outflow of $676.52 million till date.
Top movers YTD
- Gainers: Marathon Petroleum (MPC) +35.82%
- Valero Energy (VLO) +31.30%
- Diamondback Energy (FANG) +29.31%
- Targa Resources (TRGP) +28.92%
- Phillips 66 (PSX) +22.68%
- Losers: APA Corp (APA) -4.18%
- EQT Corp (EQT) -4.11%
- Baker Hughes (BKR) -1.99%
What Quantitative Measures Say
XLE received a Buy rating from Seeking Alpha’s Quant Rating system with a score of 4.38 out of 5, supported by A+ in liquidity, and A in the expenses’ category. The ETF got an A+ for momentum. However, it got a B+ for dividends and a D- for risks.
What Analysts Expect
Seeking Alpha contributor Mott Capital Management in their March 25 report said that the ETF is testing its all-time high, suggesting a potential breakout and significant rally if oil and gasoline prices increase.
“Technically and fundamentally, it would make sense for the XLE to break out and push higher, mainly depending on where oil and gasoline prices go. For the XLE, it is now the fifth time it has hit resistance at around $93.20, and all it would take is a breakout move at that level to see the ETF rise significantly. If this fifth attempt to breakout succeeds, then it seems as if we could see the XLE rally significantly, perhaps to as high as $120, when measuring the distance between resistance and the lower uptrend,” they said.