Biden A Boon For Energy

This morning we updated our key ETF performance matrix to see how various asset classes have performed since President Biden was elected back in November 2020 and since Inauguration Day in January 2021. In the matrix below, we also include performance over the last six months, which has been downright awful for most areas of financial markets outside of the commodity space.

Since Election Day 2020, the S&P 500 (SPY) has posted a strong total return of 30.7%, with Value outperforming Growth significantly across all market cap ranges. Looking at US sector ETFs, Energy (XLE) has absolutely walloped every other sector. As shown, XLE is up 173% since President Biden was elected, while the next best sector has been Financials (XLF) with a gain of 51%. Outside of the US, country ETFs like China (ASHR), Germany (EWG), and of course Russia (RSX) are in the red since Election Day 2020, while Canada (EWC) and Mexico (EWW) are up the most at 45% (15 percentage points better than SPY).

The broad commodities ETF (DBC) is up 109% since Election Day, with oil (USO) up 198%, agriculture (DBA) up 50%, gold (GLD) up just 3%, and silver (SLV) up 4.8%.Fixed-income ETFs have posted negative total returns since Biden was elected, with the 20+ Year Treasury ETF (TLT) down the most at -10%.

Returns are much weaker since Inauguration Day on 1/20/21.SPY is still up 13.9% since then, but the Nasdaq 100 (QQQ) is up just 4.8% and the Russell 2,000 (IWM) is down 6%. Looking at sectors, Energy (XLE) is easily on top with a gain of 82%. Over this same time period, Consumer Discretionary (XLY) is up just 1.9%, and Communication Services (XLC) is down 2.7%. Outside of the US, along with Russia (RSX), a number of country ETFs are down double-digit percentage points, including China (ASHR), Germany (EWG), Hong Kong (EWH), Japan (EWJ), and Spain (EWP).

Over the last six months, SPY is down 3.8%, but the Tech-heavy Nasdaq 100 (QQQ) and the small-cap Russell 2,000 (IWM) are both down more than 11%. Of the sector ETFs, Energy (XLE) is up an incredible 61.5% over the last six months, while Communication Services (XLC) is down 22.5%. The only other sector ETFs that are up over the last six months are the two main defensives — Utilities (XLU) and Consumer Staples (XLP).

Across the world, we’ve seen declines over the last six months, but Brazil (EWZ) and Canada (EWC) have bucked the trend with small gains. Commodities ETFs are solidly green, while Treasury ETFs are solidly red.

The current administration came into office solely focused on COVID, but is now facing a two-front battle against inflation and Russia’s invasion of Ukraine. Energy prices were already on the rise when the Trump administration passed the baton to the Biden administration, but things have ramped up to a completely different level over the last few months.  

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Disclaimer: For more global markets and macroeconomic coverage, make sure to check out Bespoke’s Morning Lineup and nightly Closer notes, as well as our ...

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