A Live Lesson in Value-Investing: The Energy Meltdown
We sat down and did a quick and dirty analysis of the S&P sector ETFs on a YTD basis and over the past 2 months.
Here are the sector portfolios we used for our analysis:
- XLE Energy
- XLF Financials
- XLU Utilities
- XLK Technology
- XLB Materials
- XLP Consumer Staples
- XLI Industrials
- XLV Health Care
- Results are net of management fees and transaction costs. All returns are total returns and include the reinvestment of distributions (e.g., dividends). Data is from Bloomberg.
In Q1, healthcare and energy were cheap on a relative basis, but a value investor needed to be prepared for short-term volatility: healthcare’s future was/is unclear and oil prices were on a roller coaster ride!
Well, sure enough, the short-run volatility showed up!
Here are the YTD charts for the sector SPDR ETFs:
- Health Care did the best by generating a total return of 9.7%
- Utilites did the worst by losing 7.5% YTD
- Energy has been on a whipsaw rollercoaster!
Here are the performance figures over the past 2 months–a volatile time in the market:
- Health Care maintained strong relative performance
- Energy did the worst by losing 7.9% over the past 2 months!
Value investors managed to catch a breather with healthcare, but energy investing has tried the patient of investors focused on the short-term!
Note: This site provides NO information on our value investing ETFs or our momentum investing ETFs. Please refer to this site.
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Definitions of common statistics used in our analysis are available here (towards the bottom)