Research > ETFs > ETF / ETP Commentary > 

Energy ETFs Quietly Mount Return

  • Related Symbols
  • XLE
The Energy Select Sector SPDR (XLE A), the largest equity-based energy ETF, has recently been gaining momentum, posting a gain of almost 8% over the past month in what could be a sign that the once downtrodden sector is poised to shed its laggard status.XLE targets the Energy Select Sector Index and “seeks to provide precise exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries,” according to State Street.XLE has built some momentum following recent earnings reports from Dow components Exxon Mobil (XOM) and Chevron (CVX), the two largest U.S. oil companies and some market observers believe the energy sector is poised for more near-term upside.“You’re approaching the time of year when you do tend to see a mean reversion to the laggards … so with energy being the worst performer, you could start to see a shift into the energy between now and the early part of next year,” said Mark Newton, founder of Newton Advisors, in an interview with CNBC.Value With XLEOne reason some investors may be revisiting XLE is that the energy sector is being viewed as a value destination and there has recently been a rotation to value away from growth.Analysts also expect the volume of U.S. crude oil in storage should diminish in the weeks ahead before reversing course at the end of peak driving season, along with the start of the seasonal refinery maintenance period.Still, not everyone’s convinced that energy’s recent rebound can extend for a significant amount of time.“Energy has definitely been through a really tough time given sort of all the expansion in supply because of technological changes in the industry. However, you still have a little bit more to go, I think, in the downward trend in oil overall,” said Gina Sanchez, CEO of Chantico Global, to CNBC.Related: Consider This Global Energy ETF For DividendsEnergy forecasters anticipate a deteriorating supply in 2020, placing OPEC+ in a bind. But beyond that, the slackening could result in a boom as supply growth slows down.OPEC encounters a similar situation as it readies for its December meeting, and the prospect of another year of oversupply continues.Investors have added nearly $297 million to XLE since the start of the fourth quarter.This article originally appeared on ETFTrends.com.

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.