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.
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
Tom Lydon’s clients own shares of IEO.
- Oil, Gas, & Consumable Fuels