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Market Update

Energy Impacts Your Portfolio Less Than You Think

While large-value funds typically hold more in this surging sector than other categories do, the typical stake is still small.

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The energy sector has had a dramatic year so far. After its 2020 slump, Morningstar's equity analysts highlighted energy as the lone undervalued sector in an otherwise overvalued market early this year. The sector went on to race ahead of much of the market in the first half of the year, with the rollout of coronavirus vaccines a catalyst for optimism about the economy. Even after a slump in the third quarter, energy remained ahead of other sectors: The Morningstar US Energy Index was up 44.8% for the year to date through September 2021.

Benjamin Slupecki does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.