Since the beginning of 2022, the energy sector has been outperforming the overall market amid rising commodity prices in response to a highly uncertain supply outlook. With the ongoing political response to the Russian invasion of Ukraine, commodity prices may continue to soar for the foreseeable future.
Year-to-date (YTD), the energy industry experienced a solid rally and outperformed the broader market, as evidenced by the 31.34% increase in the Energy Select Sector SPDR ETF (XLE) compared to SPDR S&P 500 Trust ETF (SPY) 13.76% loss over the same period. Consequently, investors may consider adding shares of energy stocks to protect their portfolios against the current volatility.
