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XLE posts top S&P 500 sector performance in August on oil price rebound
Energy ETF XLE rose 7.4% in August, helped by crude’s rebound after renewed US-Iran tensions revived supply worries.
The State Street Energy Select Sector SPDR ETF, or XLE, gained 7.4% in August, taking the top spot among the 11 Select Sector SPDR ETFs that track the S&P 500, according to State Street. The advance was driven by oil and gas stocks as crude rebounded through the month.
Morningstar’s equity research team cited renewed US-Iran tensions as a key catalyst for the month’s move. The outlet noted that a ceasefire reached earlier in summer had eased supply fears and weighed on crude lower, but hostilities escalated after a 60-day US-Iran memorandum of understanding deadline expired in mid-August.
State Street data showed oilfield-services and refining stocks leading XLE higher. SLB rose 21.2% in August, Marathon Petroleum gained nearly 18%, and Phillips 66 added 16.5%, while other holdings also posted double digit gains, including Apache up 15.6%, Valero up 14.7%, and Halliburton up 14.3%.
State Street holdings data indicate Exxon Mobil and Chevron remain XLE’s two largest positions, together at nearly 35% of the portfolio, though both rose more modestly than some peers, with Exxon up 3.5% and Chevron up 4.7%. The fund holds 21 stocks, carries a 0.08% expense ratio, and has grown to $41.4 billion in assets under management as of August 31, Morningstar said the North American energy sector now looks fairly valued but warned that uncertainty around the Strait of Hormuz could keep a $5 to $10 a barrel risk premium in oil for some time.
Latest closeWTI crude $90.70 ▲0.5%|S&P 500 7,666.60 ▲0.5%