Beyond the initial market pop following the reelection of Donald Trump last week, the energy sector uniquely stands out as a category that could ultimately benefit consumers but hurt investors.

It boils down the “drill baby drill” mantra that Trump carried over from his first presidential term that implies lower energy prices through increased domestic production.

For ETF investors, the energy sector was among the biggest post-election movers with bellwethers like the Energy Select Sector SPDR Fund (XLE) and the Vanguard Energy ETF (VDE) up nearly 5% over the past week.

But with the dust starting to settle, financial advisors and market watchers are considering ways to hedge the energy sector in client portfolios.

“As a standalone, more production generally means lower prices and that’s deflationary,” said Chuck Failla, principal at Sovereign Financial Group.

“However, there seem to be many, many moving parts pulling and pushing many different levers,” he added. “So, at this point, I think it’s too early to tell if the net effect of all the changes will be inflationary or disinflationary.”

Energy ETFs Brace for Trump Policies

While lower energy prices would help tamp down inflation and potentially offset any inflationary policies coming out of a Trump administration, the investment strategy presents a vaguer picture.

“Energy stocks have soared post-election on the thesis that less regulation and stronger growth will increase profits and demand,” said Paul Schatz, president of Heritage Capital.

“However, ‘drill baby drill,’ which will be good for the sector and energy independence also means more supply on the market, and more supply usually leads to lower prices which are not good for the stocks,” he added. “But the energy sector was so beaten down that the rally still has legs.”

Joy Yang, head of Index Product Management at MarketVector Indexes, said the outlook for the energy sector, from an investing perspective, is getting complicated.

“If you look at some of the investor sentiment around domestic energy, including nuclear and uranium, those policies should be disinflationary,” she said. “But you have to counter that with some of the other policies related to tariffs. How those will play out is certainly uncertain.”

Meanwhile, Yang believes the energy sector ETFs are already “pricing in expectations,” which explains the post-election rally.

“We’re seeing people trying to hedge both sides of the outcome,” she said.

Craig Golden, senior investment analyst and market strategist at Nepsis, said the risk is not separating the economy from the stock market when it comes to energy.