The Impact of China Reopening On Energy ETFs
The recent reopening of China’s economy has had an impact on energy ETFs. As the world’s second-largest economy, China’s return to growth has been a major factor in the recent upturn in global energy markets. As China has resumed production and consumption of energy, demand for oil and gas has risen, leading to higher prices for energy commodities and related ETFs.
For investors looking to capitalize on the rise in energy ETFs, there are several options to consider. The first is the Energy Select Sector SPDR Fund (XLE). XLE is a fund that tracks the performance of the Energy Select Sector of the S&P 500, which includes companies in the oil, gas, and power industries. The fund has done well since China reopened, rising from a low of $50.72 in March 2020 to a high of $63.75 in May 2020.
Another energy ETF to watch is the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). This fund tracks the performance of the S&P Oil & Gas Exploration & Production Select Industry Index, which tracks the performance of companies involved in the exploration and production of oil and natural gas. XOP has seen strong gains since China reopened, rising from a low of $27.71 in March 2020 to a high of $34.56 in May 2020.
The iShares U.S. Energy ETF (IYE) is another option to watch. This ETF tracks the performance of the Dow Jones U.S. Energy Sector Index, which includes stocks of companies that are engaged in the exploration, production, and distribution of energy products. Since China reopened, IYE has risen from a low of $15.12 in March 2020 to a high of $18.15 in May 2020.
Finally, investors should also consider the VanEck Vectors Oil Refiners ETF (CRAK). This ETF tracks the performance of the MVIS Global Oil Refiners Index, which includes stocks of companies that are engaged in the refining of petroleum products. CRAK has seen strong gains since China reopened, rising from a low of $11.50 in March 2020 to a high of $14.17 in May 2020.
In conclusion, the reopening of China has had a positive impact on energy ETFs. XLE, XOP, IYE, and CRAK have all seen strong gains in recent months, and investors looking for exposure to energy markets may want to consider these funds.