HedgeCoVest Model Takes Advantage of Oil Rally

New York (HedgeCoVest.Com) – One of the biggest stories within the investment industry over the past year has been the tremendous decline in oil prices. From the high last June to the low in March, the price per barrel of West Texas Crude fell just over 60%. Since the middle of January, crude has attempted a comeback and especially since the middle of March. With that in mind, we wanted to look at the performance of the HedgeCoVest Energy and Utilities Long-Only Model compared to two widely traded oil and energy ETFs to see how the model performed against them. The two ETFs we used in the chart were the Energy Select Sector SPDR (NYSE: XLE) and the United States Oil ETF (NYSE:USO).

Looking at the three possible investments and how they would have performed, the HedgeCoVest Energy and Utilities Long-Only Model would have gained 14.23% from January 16 through May 15 while the XLE would have gained 7.99% and the USO would have gained 12%.


While we are proud of the fact that our model beat the other two investment vehicles, what is even more impressive is that it was less volatile than the other two choices. If you look at the chart, the HedgeCoVest model was never in negative territory during this particular time frame while the USO was down almost 13% at the low in March. The XLE did a little better than the USO, but it still dipped in to negative territory on two occasions.

With the HedgeCoVest composite models, we are taking the top trades from all of the models on our platform that relate to a particular sector and making them within the model that follows that sector. The HedgeCoVest Energy and Utilities Long-Only Model is one of the 14 composite models and the performance it has shown over the last four months is a testament to the managers that manage the models and it is also a testament to active management. When a market is choppy like oil was during the time period in question, good managers with an active management style are hard to beat.

Rick Pendergraft
Research Analyst

This entry was posted in HedgeCo News, HedgeCoVest News and tagged , , , , , . Bookmark the permalink.

Leave a Reply