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Is Invesco DB Energy Fund (DBE) a Hot ETF Right Now?
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The Invesco DB Energy Fund (DBE - Free Report) was launched on 01/05/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $216.09 M, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, this particular fund seeks to match the performance of the DBIQ Optimum Yield Energy Index Excess Return.
The DBIQ Optimum Yield Energy Index Excess Return Index is a rules-based index composed of futures contracts on some of the most heavily traded energy commodities in the world: Light Sweet Crude Oil (WTI); Heating Oil; Brent Crude Oil; RBOB Gasoline; & Natural Gas. It is intended to reflect the performance of the energy sector.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for DBE are 0.78%, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nymex Light Sweet Crude Oil Future (CLH9) accounts for about 24.51% of the fund's total assets, followed by Ice Brent Crude Oil Future (COF9) and Nymex Ny Harbor Ulsd Futures (HOM9).
DBE's top 10 holdings account for about 99.91% of its total assets under management.
Performance and Risk
DBE return is roughly 18.03% so far this year, and as of 09/14/2018, is up about 36.11% in the last one year. In the past 52-week period, the fund has traded between $12.57 and $17.40.
DBE has a beta of 0.70 and standard deviation of 24.63% for the trailing three-year period, which makes the fund a high choice in the space. With about 5 holdings, it has more concentrated exposure than peers.
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 DB Energy Fund (DBE) a Hot ETF Right Now?
The Invesco DB Energy Fund (DBE - Free Report) was launched on 01/05/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $216.09 M, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, this particular fund seeks to match the performance of the DBIQ Optimum Yield Energy Index Excess Return.
The DBIQ Optimum Yield Energy Index Excess Return Index is a rules-based index composed of futures contracts on some of the most heavily traded energy commodities in the world: Light Sweet Crude Oil (WTI); Heating Oil; Brent Crude Oil; RBOB Gasoline; & Natural Gas. It is intended to reflect the performance of the energy sector.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for DBE are 0.78%, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nymex Light Sweet Crude Oil Future (CLH9) accounts for about 24.51% of the fund's total assets, followed by Ice Brent Crude Oil Future (COF9) and Nymex Ny Harbor Ulsd Futures (HOM9).
DBE's top 10 holdings account for about 99.91% of its total assets under management.
Performance and Risk
DBE return is roughly 18.03% so far this year, and as of 09/14/2018, is up about 36.11% in the last one year. In the past 52-week period, the fund has traded between $12.57 and $17.40.
DBE has a beta of 0.70 and standard deviation of 24.63% for the trailing three-year period, which makes the fund a high choice in the space. With about 5 holdings, it has more concentrated exposure than peers.
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.