The US stock market is looking wobbly again, but you wouldn’t know it by reviewing the trend in utility stocks. This interest-rate sensitive slice of equities continues to dominate the sector horse race, based on a set of proxy ETFs.
The Utilities Select Sector SPDR ETF (NYSE:XLU) is firmly in the lead so far this year through May 12 among the main US sectors. The ETF is sitting on a strong 15.5% total return year to date and is higher by nearly 18% for the trailing one-year period.
XLU’s bull-market bias looks good in absolute and relative terms. Indeed, the recent gains for the US market overall have dwindled to a crawl lately. The SPDR S&P 500 (NYSE:SPY) is ahead on a year-to-date basis by a thin 1.8%; for the past year, SPY’s total return fades to just 0.5%.
The sector realm’s perennial loser of recent years—energy—is looking firmer in 2016. After bottoming in late-January, the Energy Select Sector SPDR (NYSE:XLE) has mounted a solid rebound and is currently higher by nearly 10% year to date—second only to XLU for 2016 total returns among US sector ETFs. But the recovery for the energy fund still has a long way to go to bring its one-year total return back into the black. XLE remains dead last for the trailing 12-month period, nursing a 15.8% loss vs. the year-earlier price.
Despite the recent turbulence in the broad market, most sector funds continue enjoy a favorable momentum profile. As the next chart below shows, eight of the ten sector ETF prices (as of May 12) are above their 50- and 200-day averages at the moment. The exceptions: technology (Technology Select Sector SPDR (NYSE:XLK)) and health care (Health Care Select Sector SPDR (NYSE:XLV)), which post mixed profiles.
