Natural gas sector fund on a roll, but can it last?
Three sector ETFs have taken the performance lead in 2014:
- The First Trust ISE-Revere Natural Gas ETF (FCG | A-99) is up 40 percent since the turn of the year.
- The iShares U.S. Oil & Gas Exploration and Production ETF (IEO | A-73) is up nearly 31 percent in 2014.
- The iShares PHLX Semiconductor ETF (SOXX | A-73) is up nearly 34 percent since the start of 2014.
While all three have been phenomenal in the first half of the year, they're now riding on stretched valuations that might suggest a turnaround is near. FCG, for example, is the loftiest of the bunch, as it trades with a price-earnings ratio north of 35—towering over the S&P 500's P/E of 19. IEO and SOXX aren't too far behind either, as they trade with P/Es of 26 and 24, respectively.
Only time will tell if these funds can continue to rally through the rest of the year.