Since the start of 2022, the energy sector has been outperforming the overall market, driven by surging oil and gas prices. The main reason for this rally is a highly uncertain supply outlook amid the Russian invasion of Ukraine.
Year-to-date (YTD), the energy industry demonstrated a strong bullish momentum and surpassed the broader market, as evidenced by the 41.17% increase in the Energy Select Sector SPDR ETF (XLE) compared to SPDR S&P 500 Trust ETF’s (SPY) 15.91% loss over the same period. Therefore, investors could consider adding shares of those companies to hedge their portfolios against the current bear market.
