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After leading the markets for much of the first half of the year, energy stocks tapered off from mid-May through the start of July as a tenuous agreement between Iran and the United States helped normalize oil prices. But tensions in the Middle East have once again flared up, with the two countries exchanging missile fire and conflicting statements about maritime traffic in the Strait of Hormuz.
I downgrade iShares Global Energy ETF to "Hold," citing disappointing price action despite bullish geopolitical conditions. IXC's valuation remains attractive at a 10.3x P/E and a 1.0x PEG, with a high 3.1% yield. Concentration risk is notable, with XOM and CVX making up over 25% of the portfolio.
Oil prices have fallen back to pre-war levels, but energy ETFs may still offer opportunity as refining, LNG demand, and tight supply support the sector.
Tech capex and geopolitics have dominated the headlines this year, but opportunities emerge elsewhere. Dividend growth investing could be hitting its stride amid shifting macro and micro trends. Novel, forward-looking strategies may help asset allocators find alpha beyond traditional income approaches.
Energy sits in an unusual spot right now: it is paying real income while also producing the kind of capital gains that growth investors chase.
The iShares Global Energy ETF (NYSEARCA:IXC) pays a semi-annual distribution that swings between feast and famine depending on crude oil prices.
Elusive Iran peace talks and supply risks keep the bullish case for energy markets intact. Check these energy ETFs to ride the upside.
I see further price appreciation for both oil and natural gas, which will give a boost to energy ETFs. IXC has outperformed the broader market amid the recent Middle East conflict, validating my bullish stance. The fund tracks global energy equities, offering diversified exposure to the sector's upside.