Worst-performing ETFs Have Direct Ties to Oil

ETF Trends reported that almost all of the worst-performing ETFs in the last three months have direct ties to oil, and are being directly impacted by the tumbling oil prices.

As quoted in the market news,

Oil services ETFs are predictable members of that less-than-illustrious list. The Market Vectors Oil Service ETF (NYSEArca:OIH), iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ), SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES) entered Tuesday with an average 90-day loss of 27.6%, firmly positioning oil services stocks and ETFs as a hated asset class.

Citigroup analyst Scott Gruber stated:

We believe sentiment is unlikely to deteriorate much further as it appears to be consensus that crude prices have further downside into the spring and Oil Service estimates need to take another step lower. At the same time, many of our discussions indicate that investors believe downside for the stocks is limited, likely reflecting the achievement of trough valuation multiples. The combination of remaining negative headwinds that impede action but limited downside based on valuation is, in our view, a mark that sentiment is near the trough.

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