These ETFs are Loaded With the S&P 500’s Best Stocks

ETF Trends

To this point in the year, there are 81 S&P 500 members that have posted gains of at least 20%. Refine that search to include only large- and mega-caps and the number falls below 70.

With that many stocks posting gains well into the double-digits, it is not surprising that multiple ETFs are benefiting from all that upside. In fact, several of these ETFs track the same sector. Again not surprisingly, that sector is energy, the second-best performer in the S&P 500 this year behind utilities. [Rising Demand for Energy ETFs]

The collection of energy ETFs with broad-based exposure to the S&P 500’s 20% club is not confined to the most traditional sector funds. For example, the Energy Select Sector SPDR (XLE) is this year’s top asset-gathering ETF and has impressed with a year-to-date gain of 14% despite. That is impressive considering the ETF’s heavy exposure to Exxon Mobil (XOM) and Chevron (CVX), two stocks that have been energy sector laggards this year. [Energy Boom Lifts ETFs]

One ETF with ample exposure to some this year’s top performers in the S&P 500 is the Market Vectors Oil Service ETF (OIH) .

A frequent criticism of OIH is that the ETF is too top heavy as it allocates nearly 34% of its combined weight to Schlumberger (SLB) and Halliburton (HAL). That would be a bad thing if those stocks were slumping, but shares of Schlumberger an Halliburton are up 31.5% and 39.3%, respectively, this year.

Throw in OIH’s exposure to Baker Hughes (BHI) and Helmerich & Payne (HP), two other members of the up 20% club, and 43% of OIH’s weight is allocated to S&P 500 members that are up at least 20% this year. OIH itself is up 20% year-to-date. [Oil Services ETF: An Energy Leader]

Another ETF benefiting from soaring energy stocks is the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) . IEO’s exposure to S&P 500 stocks up at least 20% is so deep, it is best to just those stocks in alphabetical order.

In that order, the list starts with Anadarko Petroleum (APC), ConocoPhillips (COP), Devon Energy (DVN), EOG Resources (EOG), Pioneer Natural Resources (PXD) and finishes with Cimarex Energy (XEC).

On its own, it is good news for IEO investors that ConocoPhillips is 14% of the ETF’s weight. The better news is that the aforementioned stocks combined for about 40% of IEO’s weight and that explains why IEO is up 18.1% this year.

Do not forget the Market Vectors Unconventional Oil & Gas ETF (FRAK) . FRAK is up 11% over the past 90 days, making it one of the top-performing industry ETFs over that period.

The $86 million FRAK allocates about a quarter of its weight to Anadarko, EOG, Devon Energy and Pioneer Natural Resources. Cimarex accounts for 2% of FRAK. [Old Energy M&A Rumor Boosts This ETF]

 iShares U.S. Oil & Gas Exploration & Production ETF

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Tom Lydon’s clients own shares of IEO.

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