Energy Stocks Outperform as Oil Tops $100 a Barrel
Energy and natural resource stock funds are surging in 2026, sharply outperforming major stock and bond indexes as oil prices break $100 a barrel
Oil prices have broken $100 a barrel for the first time since July. According to a MarketWatch opinion column by Brett Arends, this surge is happening while most other stock and bond indexes remain sluggish or are declining.
Energy and resource stock funds are posting significant gains. The ongoing conflict in the Gulf region is cited as a contributing factor to the commodity boom.
Comparative Fund Performance in 2026
The column provides a comparison of year-to-date returns for several major exchange-traded funds. The data shows a stark divergence between energy-focused funds and broader market indexes.
| Fund Name & Ticker | Description | 2026 Return |
|---|---|---|
| State Street Select Energy SPDR ETF (XLE) | Index fund of major U.S. Energy companies like Exxon and Chevron | +47% |
| Global Natural Resources SPDR ETF (GNR) | Fund investing in commodity stocks for mining and agriculture | +29% |
| S&P 500 SPDR (SPY) | Tracks the S&P 500 index | +13% |
| Invesco QQQ Trust (QQQ) | Index fund following the Nasdaq-100 | +17% |
| Vanguard FTSE Developed Markets ETF (VEA) | Index fund for non-U.S. Advanced economy stocks | +18% |
| iShares Core U.S. Aggregate Bond ETF (AGG) | Popular index fund for bonds | -0.33% |
| Vanguard Balanced Index Fund (VBINX) | 60% stocks / 40% bonds portfolio | Historical avg. 7.1% |
These figures are presented before accounting for fees, taxes, and inflation.
The Diversification Benefit
Arends argues that the performance of energy stocks has provided a valuable diversification benefit for retirement accounts like 401(k)s. He states that these stocks have "zigged while the market has zagged." They produced gains in March when other indexes fell and are rising again now.
This pattern, the column suggests, offers investors a dual advantage: bigger gains and smoother overall returns. It calls this combination the "investors' holy grail." The author notes that MarketWatch had previously recommended adding such funds to retirement portfolios.
A Long-Term Strategic Case
The argument for including energy or natural resource stocks is not based on short-term trading or the current geopolitical situation. Arends frames it as a long-term strategic move. He writes that for over 25 years, "having some of this simple energy index fund (or an equivalent) inside your retirement accounts, alongside your regular stock and bond funds, has been a winning move."
The analysis claims this approach has historically generated more money while reducing portfolio risks. The column cautions against chasing recent performance, noting the best time to buy was likely not now but in the past, such as April 2020 when oil futures famously traded negatively. The core recommendation is for a steady, non-tinkering allocation within a long-term retirement portfolio.
MarketWatch's Brett Arends concludes that the current oil price milestone highlights the ongoing relevance of this asset class for portfolio construction.
