ETFriday: Energy and Emerging Markets Split the Top While Gold Miners Sit at 28% Drawdowns

This Week's Setup

Energy and emerging markets split the top two Pixie Ranks for the first time in eight weeks, both landing at earnings yields near 4.8 percent while drawdowns hold under 11 percent.

Utilities bracket them at ranks three and four with nearly identical earnings yields of 4.7 percent and 8.4–8.7 percent drawdowns, the tightest valuation cluster since March when defensive sectors last compressed spreads below ten basis points.

Gold miners sit at rank seven with a 28.5 percent drawdown and a 5.9 percent earnings yield, the deepest pullback on the screen while Fear & Greed registers 64, the first read above 60 since late July.

Quick Scan

The 8 Names

1. State Street Energy Select Sector SPDR ETF (XLE)

3y annualized return: n/a | Life annualized return: 6.10% | 52w drawdown: -9.01%

XLE owns Pixie Rank 1 at an earnings yield of 4.78 percent, 467 basis points above the most recent 10-year Treasury yield context, the widest spread on the screen this week. The portfolio trades at 1.11× book value and 20.9× trailing earnings while the sector navigates two consecutive sessions of premarket declines against a backdrop of strong tech results elsewhere.

Free cash flow yield remains unavailable for sector ETFs, obscuring the cash-return picture beneath the earnings metric; distribution yield sits at 3.74 percent, a 104-basis-point gap below the earnings yield that flags reinvestment or sector-structure friction. The 9.01 percent drawdown sits at the upper edge of the moderate-dip zone, leaving limited technical cushion if commodity volatility resurfaces.

2. Freedom 100 Emerging Markets ETF (FRDM)

3y annualized return: n/a | Life annualized return: 17.04% | 52w drawdown: -10.26%

FRDM delivers a 4.79 percent earnings yield at Pixie Rank 2, matching XLE's spread over the 10-year Treasury while posting a 17.04 percent annualized life return, the highest on the screen. The 10.26 percent drawdown stays inside the moderate-dip zone while the portfolio screens for political and economic freedom, a structural filter absent from cap-weighted EM benchmarks.

Price-to-book and dividend yield data remain unavailable, removing two valuation cross-checks that anchor relative-value decisions in broader EM comparisons. The trailing twelve-month trend contribution of 23 basis points lags IEMG's 120 basis points and AVEM's 130 basis points, signaling weaker short-term price momentum despite the superior long-term CAGR.

3. State Street Utilities Select Sector SPDR ETF (XLU)

3y annualized return: n/a | Life annualized return: 10.12% | 52w drawdown: -8.72%

XLU ranks third at a 4.72 percent earnings yield and a 4.47 percent distribution yield, the second-highest payout on the screen after VPU's 2.30 percent tax-adjusted equivalent. The 8.72 percent drawdown sits at the shallow end of the moderate-dip zone while the 0.6818 price-to-book ratio flags asset-intensive utilities trading below replacement cost, a setup that historically precedes rerating when capital spending on AI data centers accelerates.

News flow highlights earnings growth momentum ETF interest and Wall Street sentiment checks on PPL and Dominion Energy, two top holdings navigating grid-expansion capex cycles. The sector captured analyst attention in XLU versus VPU comparisons tied to AI power demand, a catalyst cluster that arrived after utilities spent three months range-bound near year-to-date lows.

4. Vanguard Utilities Index Fund ETF Shares (VPU)

3y annualized return: n/a | Life annualized return: 10.02% | 52w drawdown: -8.40%

VPU posts a 4.74 percent earnings yield at rank four, two basis points above XLU while trading at 1.82× book value, a 119-basis-point premium to XLU's asset-discount setup. The 8.40 percent drawdown is the shallowest in the utilities pair while the 10.02 percent annualized life return trails XLU by ten basis points, a rounding-error gap that disappears inside tax-adjusted distribution math.

Zacks asked whether VPU merits investment while 24/7 Wall St. framed the XLU-versus-VPU decision around AI data-center power demand, the first time sector coverage explicitly tied utility rerating to hyperscaler infrastructure spending. The news cluster arrived within 48 hours, signaling synchronized editorial interest in a sector that spent two quarters ignored by momentum-chasing flows.

5. Avantis Emerging Markets Equity ETF (AVEM)

3y annualized return: n/a | Life annualized return: 12.18% | 52w drawdown: -7.19%

AVEM captures a 6.08 percent earnings yield at Pixie Rank 5, the highest on the screen, while trading at 16.46× trailing earnings, a 362-basis-point P/E discount to FRDM and 258 basis points below IEMG. The 7.19 percent drawdown is the shallowest among emerging-market funds while the 141-basis-point yield spread over the 10-year Treasury is the widest in the EM cohort, a valuation edge tied to Avantis's factor-tilt methodology that overweights profitability and value screens.

Avantis Investors crossed $150 billion in assets under management in under seven years, a milestone announced the same week NVIDIA committed $150 billion to AI infrastructure spending in Taiwan, a geographical overlap that elevates AVEM's Taiwan allocation from sector noise to front-page catalyst. The 12.18 percent annualized life return sits 520 basis points below FRDM but 586 basis points above IEMG, bracketing the EM-return distribution at the factor-adjusted midpoint.