Title: The impact of COVID-19 on the performance and risks of the US energy ETF and equity portfolios

Authors: Ikhlaas Gurrib; Qian Long Kweh; Irene Wei Kiong Ting; Mohammad Nourani

Addresses: Faculty of Management, Canadian University Dubai, P.O. Box 117781, 1st Interchange, Sheikh Zayed Road, Dubai, UAE ' Faculty of Management, Canadian University Dubai, P.O. Box 117781, 1st Interchange, Sheikh Zayed Road, Dubai, UAE ' Faculty of Industrial Management, Universiti Malaysia Pahang, 26300 Gambang, Pahang, Malaysia ' Waikato Management School, University of Waikato, Hangzhou, China

Abstract: This paper examines the use of energy-based ETF portfolios, opposed to traditional equity-based portfolios. Amid the recent negative returns of energy ETFs and outbreak of COVID-19 pandemic, we aim to assess 1) which of the US sectors are best to combine with the energy sector, 2) how a sector-based ETF portfolio's risk and return differ from an equity-based one, 3) how COVID-19 affected the sector-based portfolio performance compared to an equity-based one. Monthly data ranging from sector-based ETF and equity prices are sourced from September 2001 to June 2020. Findings suggest 1) the utilities sector to be consistently the most appropriate asset mix for a portfolio comprising the energy sector, 2) an equity-based portfolio was superior in performance than its sector-based counterpart, after adjusting for total and downside risk, 3) both sector- and equity-based portfolios shared similar impacts from COVID-19, with the latter maintaining superior portfolio performance in both pre- and post- COVID-19.

Keywords: energy; exchange-traded fund; ETF; portfolio; equity portfolio; performance evaluation; COVID-19.

DOI: 10.1504/IJBEX.2025.146979

International Journal of Business Excellence, 2025 Vol.36 No.3, pp.295 - 320

Received: 03 Feb 2021
Accepted: 03 Jul 2021
Published online: 10 Jul 2025 *

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