XLE is an exchange-traded security that seeks to provide investment results that correspond to the price and yield performance of the Energy Select Sector Index. In seeking to track the performance of the index, the fund employs a replication strategy. The fund generally invests the majority of its assets in the securities comprising the index, which includes securities from the oil, gas, and consumable fuels industries as well as energy equipment and services companies.
When is the best month to buy XLE?
Energy Select Sector SPDR Fund has performed the best during the month of April, during which shares have returned an average of 4.3% over the last 25 years.
When is the worst month to buy XLE?
Energy Select Sector SPDR Fund has performed the worst during the month of September, during which shares have returned an average of -0.83% over the last 25 years.
Seasonality can be defined as the predictable changes that occur over a one-year period in an economy, market or business, based on the seasons of the calendar year.
Academic research supports the notion that seasonal pricing patterns occur with regularity in futures contracts of commodities with fixed maturities, most notably in the natural gas and crude oil markets.
For example, Ewald, Haugom, Stordal, Lien and Wu find evidence for seasonality in futures products that appears distinct from the seasonal patterns in spot price for the respective commodities.
Traders often attempt to take advantage of seasonal patterns through spread trades that hold long and short positions in assets of differing maturities simultaneously or across related assets in financial products such as
equity sector ETFs,
index futures or
commodities.
Investors in individual equities may take seasonality into account when when analyzing the impact that seasonal changes may have on the fortunes of particular companies. For example, for many businesses, sales can vary depending on the season. In such cases, the share prices of business that experience higher profits during specific seasons may simultaneously register significant gains while later giving them back during off-peak periods.
