XLE The Clear Sector Leader
05/03/2011 0 comments
In a retirement account, Sector investing can be very worthwhile. It can lead to portfolio returns that “beat the market”. Sectors offer a way of focusing, in a disciplined fashion, similar to looking at Countries, or broad markets. At any given point in time, one or more sectors may be out performing other sectors, and the broad stock market. Portfolios that include Sector allocation can capture this performance.
A great way to get sector exposure is through exchange traded funds. Today, there are numerous 'sector' type exchange traded funds that you can invest in. The iShares and the SPDR lineups are probably the two most popular. However there are several other providers that offer unique and interesting sector and industry ETFs.
Below is the Sector performance table, sorted by “Trend Score”, which is also posted at MyPlanIQ - Global Trends .
US Sectors TrendPerformance data are based on closing prices on April 29th 2011
|
Description |
Symbol |
1 Week |
4 Weeks |
13 Weeks |
26 Weeks |
52 Weeks |
Trend Score |
|---|---|---|---|---|---|---|---|
|
Energy |
1.9% |
0.61% |
13.56% |
36.92% |
36.63% |
17.92% |
|
|
Industries |
2.84% |
1.9% |
8.48% |
21.41% |
22.37% |
11.4% |
|
|
Materials |
1.04% |
1.74% |
8.45% |
18.79% |
24.64% |
10.93% |
|
|
Healthcare |
2.89% |
5.89% |
11.99% |
14.16% |
17.58% |
10.5% |
|
|
Telecom |
1.95% |
2.63% |
7.69% |
14.23% |
25.69% |
10.44% |
|
|
Consumer Discretionary |
1.6% |
3.18% |
9.67% |
16.07% |
18.29% |
9.76% |
|
|
Consumer Staples |
2.01% |
4.82% |
9.38% |
11.14% |
17.39% |
8.95% |
|
|
Technology |
1.48% |
2.81% |
3.87% |
10.58% |
15.95% |
6.94% |
|
|
Utilities |
2.85% |
3.24% |
5.8% |
6.83% |
13.65% |
6.48% |
|
|
Financial |
1.74% |
-0.91% |
1.06% |
13.2% |
2.44% |
3.51% |
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
With all of the headline news lately, it is no surprise that the Energy Sector ETFs are the strongest. The holdings inside the ETFs usually include the large cap oil companies such as Exxon and Chevron, and, some of the smaller cap companies. When crude oil, and petroleum product prices rise, usually the margins of the oil companies expand. An example could be the cost of production of a barrel of crude stays relatively fixed, as the selling price of the barrel of crude goes higher. Similarly, some of the costs of refining a gallon of gasoline stay relatively fixed, as the selling price of that gallon goes higher.
These energy sector ETFs are definitely on my retirement portfolio watch list this year.
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Exchange Tickers: (NYSE:XLE), (NYSE:XLI), (NYSE:XLB), (NYSE:XLV), (NYSE:IYZ), (NYSE:XLY), (NYSE:XLP), (NYSE:XLK), (NYSE:XLU), (NYSE:XLF)
Symbols: XLE, XLI, XLB, XLV, IYZ, XLY, XLP, XLK, XLU, XLF
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