The bull market for energy stocks still has room to run, and there are cheap exchange traded funds on the market to help investors ride along, according to Bank of America. Energy underperformed the broader market in January, with the Energy Select Sector SPDR Fund returning just 2.8%. February got off to an even worse start, with the fund falling nearly 2% on Wednesday. The underwhelming month followed a big year for energy stocks in 2022.
We have a favorable view based on valuation, light positioning, and strong commodity & equity fundamentals," the note said. Investors don't need to get too exotic to take advantage of this setup, according to Woodard. Bank of America's top picks for energy ETFs include the broad SPDR fund, the Vanguard Energy ETF and the Invesco S & P 500 Equal Weight Energy ETF .
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