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Is Invesco Dynamic Energy Exploration & Production ETF (PXE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) debuted on 10/26/2005, and offers broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PXE has amassed assets over $350.50 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Energy Exploration & Production Intellidex Index.
The Dynamic Energy Exploration & Production Intellidex Index is composed of stocks of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for PXE are 0.63%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.18%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 97.70% of the portfolio.
Taking into account individual holdings, Chord Energy Corp (CHRD - Free Report) accounts for about 5.56% of the fund's total assets, followed by Occidental Petroleum Corp (OXY - Free Report) and Marathon Petroleum Corp (MPC - Free Report) .
The top 10 holdings account for about 47.66% of total assets under management.
Performance and Risk
So far this year, PXE has added about 73.69%, and was up about 68.25% in the last one year (as of 11/15/2022). During this past 52-week period, the fund has traded between $18.13 and $36.33.
The ETF has a beta of 1.87 and standard deviation of 52.15% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Energy Exploration & Production ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) tracks Dow Jones U.S. Select Oil Exploration & Production Index and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) tracks S&P Oil & Gas Exploration & Production Select Industry Index. IShares U.S. Oil & Gas Exploration & Production ETF has $1.26 billion in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $5.50 billion. IEO has an expense ratio of 0.39% and XOP charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco Dynamic Energy Exploration & Production ETF (PXE) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) debuted on 10/26/2005, and offers broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PXE has amassed assets over $350.50 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Energy Exploration & Production Intellidex Index.
The Dynamic Energy Exploration & Production Intellidex Index is composed of stocks of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for PXE are 0.63%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.18%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 97.70% of the portfolio.
Taking into account individual holdings, Chord Energy Corp (CHRD - Free Report) accounts for about 5.56% of the fund's total assets, followed by Occidental Petroleum Corp (OXY - Free Report) and Marathon Petroleum Corp (MPC - Free Report) .
The top 10 holdings account for about 47.66% of total assets under management.
Performance and Risk
So far this year, PXE has added about 73.69%, and was up about 68.25% in the last one year (as of 11/15/2022). During this past 52-week period, the fund has traded between $18.13 and $36.33.
The ETF has a beta of 1.87 and standard deviation of 52.15% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Energy Exploration & Production ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) tracks Dow Jones U.S. Select Oil Exploration & Production Index and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) tracks S&P Oil & Gas Exploration & Production Select Industry Index. IShares U.S. Oil & Gas Exploration & Production ETF has $1.26 billion in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $5.50 billion. IEO has an expense ratio of 0.39% and XOP charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.