Energy was the second-worst performing sector in the S&P 500 in the second quarter (NYSEARCA:XLE)

Energy Select Sector SPDR Fund ETF (NYSEARCA:XLE), which tracks the energy sector, fell by 4.5% in the second quarter of 2024, exactly opposite to the behavior of the broader S&P 500 index (SP500), which increased by 4.6% in the same period.

A fund consisting of companies dealing with oil extraction, drilling, refining and transportation were among worst performing sectors of the S&P 500 for a period of one month, with a delay Down 0.62%.

However, the ETF had a YTD increased by 8.3% but it was still far away increase by almost 15% in the reference index for the same period. Crude Oil Futures (CL1:COM) increased by 11.9%while the S&P 500 Energy Index (SP500-1010) increased by 9.1% Meet with someone.

Within the index, the index of energy equipment and services (SP500-101010) fell by 5.7%while the index of crude oil, gas and consumer fuels (SP500-101020) increased by 10.6% Meet with someone.

U.S. equity fund inflows into and out of the energy sector were negative for most weeks in the second quarter of 2023. The net outflow from this ETF for the quarter was $613.89 million.

Image source: etfdb.com

The biggest changes since the beginning of the year

• Profits:
• Targa Resources (TRGP) +48%
• Diamondback Energy (FANG) +31%
• Williams (WMB) +22%
• Valero Energy (VLO) +21%
• Marathon Oil (MRO) +19%
• Losers: APA Company (APA) -18%
• SLB (SLB) -9%
• Halliburton (HAL) -7%
• EQT Company (EQT) -4%
• ConocoPhillips (COP) -1%

What do quantitative measures say?

XLE has a Buy rating from Seeking Alpha’s Quant Rating system with a score of 4.05 out of 5, supported by an A+ for liquidity and an A for expenses. The ETF has an A- for momentum. However, it has a B+ for dividends and a D- for risk.

What analysts say

Seeking Alpha contributor JR Research said in its June 14 report that XLE’s solid “B+” momentum rating underscores the solidity of buyer sentiment. They added that the recent pessimism does not suggest a significant change to a downward trend. XLE’s relatively attractive 3.3% dividend yield should attract income investors as the Fed moves closer to cutting interest rates.

“Estimates of energy sector profit growth are not falling off the cliff. Stakeholders remained disciplined in their production capacity, which helped keep oil prices relatively high. As you can certainly see with dip buys… Saudi Arabia’s influence cannot be underestimated. Normalizing the growth of electric vehicles highlights the complexity of the energy transition thesis. To increase energy demand through AI upcycling, more robust estimates of data center growth will likely require participation from all energy players. In other words, I did not assess sufficient structural weakness in the energy sector thesis to persuade me to change my bullish assessment of its growth prospects,” the report said. The author maintained his “Buy” recommendation for the fund.

More about the Energy Select Sector SPDR ETF