By Alpha Architect. Originally published at ValueWalk.
A Live Lesson in Value-Investing: The Energy Meltdown by Alpha Architect, Author of Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors.
We sat down and did a quick and dirty analysis of the S&P sector ETFs on a YTD basis and over the past 2 months.
Here are the sector portfolios we used for our analysis:
- XLE Energy
- XLF Financials
- XLU Utilities
- XLK Technology
- XLB Materials
- XLP Consumer Staples, Inc. (NASDAQ:SPLS)
- XLI Industrials
- XLV Health Care
- Results are net of management fees and transaction costs. All returns are total returns and include the reinvestment of distributions (e.g., dividends). Data is from Bloomberg.
In Q1, healthcare and energy were cheap on a relative basis, but a value-investor needed to be prepared for short-term volatility: healthcare’s future was/is unclear and oil prices are on a rollercoaster ride!
Well, sure enough, the short-run volatility showed up!
Here are the YTD charts for the sector SPDR ETFs:
Value-Investing
- Health Care did the best by generating a total return of 9.7%
- Utilites did the worst by losing 7.5% YTD
- Energy has been on a whipsaw rollercoaster!
Here are the performance figures over the past 2 months–a volatile time in the market:
- Health Care maintained strong relative performance
- Energy did the worst by losing 7.9% over the past 2 months!
Value investors managed to catch a breather with healthcare, but energy investing has tried the patient of investors focused on the short-term!
The post A Live Lesson in Value-Investing: The Energy Meltdown appeared first on Alpha Architect.
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