Best And Worst Q2 2021: Energy ETFs And Mutual Funds
Summary
- The Energy sector ranks tenth in Q2'21.
- Based on an aggregation of ratings of the 157 stocks in the Energy sector.
- EMLP is our top-rated Energy sector ETF and ICBMX is our top-rated Energy sector mutual fund.
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The Energy sector ranks tenth out of the 11 sectors as detailed in our Q2'21 Sector Ratings for ETFs and Mutual Funds report. Last quarter, the Energy sector ranked ninth. It gets our Unattractive rating, which is based on an aggregation of ratings of the 157 stocks in the Energy sector. See a recap of our Q1'21 Sector Ratings here.
Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the sector. Not all Energy sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 18 to 158). This variation creates drastically different investment implications and, therefore, ratings.
Investors seeking exposure to the Energy sector should check out the Very Attractive rated ETF from Figure 1.
Figure 1: ETFs with the Best & Worst Ratings
* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.
Sources: New Constructs, LLC and company filings
Figure 2: Mutual Funds with the Best & Worst Ratings
* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.
Sources: New Constructs, LLC and company filings
EMLP is the top-rated Energy ETF and ICBMX is the top-rated Energy mutual fund. EMLP earns a Very Attractive rating and ICBMX earns a Neutral rating.
PXE is the worst rated Energy ETF and RYESX is the worst Energy mutual fund. They both earn a Very Unattractive rating.
157 stocks of the 2800+ we cover are classified as Energy stocks.
The Danger Within
Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. Put another way, research on fund holdings is necessary due diligence because a fund's performance is only as good as its holdings' performance.
Performance of Holdings = Performance of Fund
Analyzing each holding within funds is no small task. Our Robo-Analyst technology enables us to perform this diligence with scale. More of the biggest names in the financial industry (see At BlackRock, Machines Are Rising Over Managers to Pick Stocks) are now embracing technology to leverage machines in the investment research process. Technology may be the only solution to the dual mandate for research: Cut costs and fulfill the fiduciary duty of care. Investors, clients, advisors and analysts deserve the latest in technology to get the diligence required to make prudent investment decisions.
Figures 3 and 4 show the rating landscape of all Energy ETFs and mutual funds.
Figure 3: Separating the Best ETFs From the Worst ETFs
Sources: New Constructs, LLC and company filings
Figure 4: Separating the Best Mutual Funds from the Worst Mutual Funds
Sources: New Constructs, LLC and company filings
This article originally published on April 14, 2021.
Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector or theme.
This article was written by
Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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