US Stock Market Sees Rise in New FANG, Not IT... Growing Interest in Energy Stocks

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The 'FANG' stocks, which had led the rise in the U.S. stock market, are declining, and a new 'FANG' is emerging, the Wall Street Journal (WSJ) reported on the 22nd (local time). The new FANG refers to Fuel, Agriculture, Natural resources, and Gold.

WSJ stated, "Energy stocks are the hottest this year and are leading the stock market," reporting that the energy sector of the S&P 500 index has risen 37% so far this year. Only two sectors have shown positive returns this year, and considering that the financial sector rose by 1%, the energy sector's increase is overwhelming. In contrast, the IT sector among the 11 sectors of the S&P 500 has fallen 9.8% this year.

IT has been the core sector driving the U.S. stock market's rise for over a decade. Especially popular among investors were Facebook, Amazon, Netflix, and Google, collectively called 'FANG' stocks after their initials. Including Apple turns it into 'FAANG.' However, this year, these stocks have been shunned by investors, and the new 'FANG' stocks are gaining attention.

Nick Zikomakis, founder of NEIRG Wealth Management, explained that Fuel, Agriculture, Natural resources, and Gold are the new FANG. This reflects the surge in prices of crude oil, natural resources, and grains following Russia's invasion of Ukraine, as well as the rising price of gold as a safe-haven asset.

WSJ also explained that high dividend yields and the resumption of share buybacks contributed to the rise of the energy sector. The energy sector's dividend yield is 2.9%, higher than the overall S&P 500 dividend yield of 1.3% and also higher than the U.S. 10-year Treasury yield (2.375%). Additionally, energy companies began repurchasing shares last year, with the scale of buybacks nearly tripling compared to the previous year.

This content was produced with the assistance of AI translation services.