The energy sector is in focus after a sharp rally. One measure of the group, the SPDR Energy Fund (XLE), rallied 6% Tuesday alone and is up 10% in a little more than one week. In this TrackStar Insights edition of Advisors In Focus, we track recent trends in the sector, how investors have reacted to the recovery in crude oil, and what tickers are seeing increased interest among financial advisors lately.
In terms of sectors, the most researched groups by financial advisors over the past month include precious metals, materials, technology, and oil & gas.
Oil and gas is currently the fourth most searched sector by financial advisors over the past month, according to TrackStarIQ rankings, and energy is the seventh (while the oil and gas category includes leveraged and commodity ETFs like USO and UNG, energy includes equity funds such as XLE and XOP). The top ten sectors, based on pageviews, are listed below:
- Precious Metals
- Oil & Gas
- Health & Biotech
- Real Estate
While oil and gas ranks highly, interest in the sector as a whole is nowhere near late-April levels. Since many investors likely suffered losses when crude oil tumbled on demand concerns—sending front-month futures contracts into negative territory on April 20th—the increase in volatility probably motivated some advisors and retail investors to reduce exposure to the sector.
If, for example, you look at the number of pageviews for tickers in energy or oil & gas ETFs since crude oil futures went negative in late-April (shown below), then you can see a dramatic decline in interest through May, June, and into July. Furthermore, the decline is detectible across all audience segments: from retail investors to high-AUM financial advisors.
Total daily pageviews for ETF tickers in the energy sector (XLE, USO, UNG, etc.). 3-Day Average.
Crude oil prices have stabilized; the energy sector also saw a major acquisition recently—when Chevron (CVX) announced a deal to buy Noble Energy (NBL) in a $5 billion deal on Monday—and interest in certain energy tickers is brewing.
For example, Exxon Mobil (XOM), the largest energy company by market value, saw a sharp jump in interest last week, according to TrackStarIQ rankings. From the week of July 11th to the week of July 17th, pageviews for XOM were up 285%. Nabors Industries (NBR), which surged 26% Tuesday, saw an 800% increase in pageviews from the prior week. Other names with signs of growing interest include several low-priced stocks: Noble Corp (NE), Tetra Tech (TTEK), and Sasol (SSL).
Lastly, Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares Fund (GUSH) saw the biggest increase in engagement among oil and gas ETFs. The leveraged fund was created to move twice the daily performance of the SPDR S&P Oil & Gas Exploration & Production Fund (XOP) and rallied 13.6% Tuesday amid the broader strength in the energy sector. Engagement in the ticker, measured by pageviews, rose 150% last week ahead of the rally.