S&P Energy is the only sector not to return double-digit growth year-to-date in 2019 and has significantly underperformed the broader market over the past decade.
This decade-long underperformance can largely be attributed to weak commodity pricing during the period as a result of the rapid growth in U.S. production capacity due to the technological advances that enabled the U.S. shale expansion. The sector’s general inability to withstand prolonged periods of volatility in commodity pricing due to weak balance sheets among the S&P Energy components has led to about 400 total bankruptcies dating back to the