We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Geopolitics has resulted in a steep decline in the stock market. While most equity sectors are plunging, energy is shining as energy prices are soaring in the escalating tension between Russia and Ukraine. This is especially true as Russia is the second biggest exporter of crude oil after Saudi Arabia and the world's largest natural gas exporter. So, any political or economic turmoil in Russia will disrupt the oil supply in the already tight energy market.
Given this, energy ETFs, which are enjoying a smooth ride this year, are poised to rally further from the worsening Russia-Ukraine crisis. While most of the ETFs stand to gain, Invesco S&P SmallCap Energy ETF (PSCE - Free Report) , First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) , SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) , Invesco DWA Energy Momentum ETF (PXI - Free Report) and Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) led the way higher on Feb 23 trading session.
Current Trends
The cost of a wide range of commodities from oil to grains to metals has jumped on worries that commodity flows will be disrupted by the Ukraine crisis. Brent returned to triple digits, topping $100 per barrel for the first time since 2014 after Russian President Vladimir Putin launched a "special military operation" in the eastern Donbas region of Ukraine. The move has sparked concerns that a war in Europe could disrupt global energy supplies (read: Russia-Ukraine Tensions Escalate: 3 ETFs to Buy).
U.S. President Joe Biden already announced the first wave of sanctions against Russia, targeting its elite banks and sovereign debt, and promised more if there are further incursions into Ukraine. The United Kingdom has also imposed economic sanctions against five Russian banks and three wealthy individuals. Meanwhile, the European Union has signaled that it is ready to impose further penalties unless Putin changes course. Germany halted a major gas pipeline project, Nord Stream 2, from Russia.
Sanctions by the United States and other countries will force Russia to supply less crude or natural gas that would have substantial implications on oil prices and the global economy. Russia accounts for one in every 10 barrels of oil consumed globally. Since the start of February, oil prices have jumped more than 10% amid the tensions and are pushing the gas prices higher from already elevated levels.
Per GasBuddy, national average gas prices currently stand at $3.47, up 16.5 cents a gallon from a month ago and 97.2 cents a gallon from a year ago. Experts expect gas price to spike to $4 a gallon by early spring after Russia gets hit by sanctions (read: 5 Leveraged Energy ETFs to Play Russia-Ukraine Tensions).
Invesco S&P SmallCap Energy ETF offers exposure to the companies that are principally engaged in producing, distributing or servicing energy-related products, including oil and gas exploration and production, refining, oil services and pipelines. It tracks the S&P Small Cap 600 Capped Energy Index, holding 32 stocks in its basket.
Invesco S&P SmallCap Energy ETF has accumulated $127.8 million in its asset base and charges 29 basis points (bps) in annual fees. It trades in an average daily volume of 496,000 shares and gas a Zacks ETF Rank #3 (Hold).
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report)
First Trust ISE-Revere Natural Gas Index Fund offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 43 stocks in its basket.
First Trust ISE-Revere Natural Gas Index Fund has amassed $523.2 million in its asset base while charging 60 bps in annual fees. Volume is good, with 1.7 million shares exchanged per day on average. The product has a Zacks ETF Rank #3.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report)
SPDR S&P Oil & Gas Exploration & Production ETF provides exposure to 59 oil and gas exploration and production companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index.
SPDR S&P Oil & Gas Exploration & Production ETF has AUM of $4.2 billion and trades in an average daily volume of 8 million shares. The fund charges 35 bps in fees per year and has a Zacks ETF Rank #3 with a High risk outlook (read: How to Invest in Energy ETFs).
Invesco DWA Energy Momentum ETF tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies showing relative strength (momentum). The fund has 45 stocks in its basket and AUM of $198.1 million.
Invesco DWA Energy Momentum ETF charges 60 bps in annual fees and trades in a good volume of 121,000 shares a day on average. PXI has a Zacks ETF Rank #3 with a High risk outlook.
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report)
Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.
Holding 32 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $486.4 million in its asset base and charges 63 bps in annual fees. It has a Zacks ETF Rank #3 with a High risk outlook.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Russia-Ukraine Crisis Powers Rally in Energy ETFs
Geopolitics has resulted in a steep decline in the stock market. While most equity sectors are plunging, energy is shining as energy prices are soaring in the escalating tension between Russia and Ukraine. This is especially true as Russia is the second biggest exporter of crude oil after Saudi Arabia and the world's largest natural gas exporter. So, any political or economic turmoil in Russia will disrupt the oil supply in the already tight energy market.
Given this, energy ETFs, which are enjoying a smooth ride this year, are poised to rally further from the worsening Russia-Ukraine crisis. While most of the ETFs stand to gain, Invesco S&P SmallCap Energy ETF (PSCE - Free Report) , First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) , SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) , Invesco DWA Energy Momentum ETF (PXI - Free Report) and Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) led the way higher on Feb 23 trading session.
Current Trends
The cost of a wide range of commodities from oil to grains to metals has jumped on worries that commodity flows will be disrupted by the Ukraine crisis. Brent returned to triple digits, topping $100 per barrel for the first time since 2014 after Russian President Vladimir Putin launched a "special military operation" in the eastern Donbas region of Ukraine. The move has sparked concerns that a war in Europe could disrupt global energy supplies (read: Russia-Ukraine Tensions Escalate: 3 ETFs to Buy).
U.S. President Joe Biden already announced the first wave of sanctions against Russia, targeting its elite banks and sovereign debt, and promised more if there are further incursions into Ukraine. The United Kingdom has also imposed economic sanctions against five Russian banks and three wealthy individuals. Meanwhile, the European Union has signaled that it is ready to impose further penalties unless Putin changes course. Germany halted a major gas pipeline project, Nord Stream 2, from Russia.
Sanctions by the United States and other countries will force Russia to supply less crude or natural gas that would have substantial implications on oil prices and the global economy. Russia accounts for one in every 10 barrels of oil consumed globally. Since the start of February, oil prices have jumped more than 10% amid the tensions and are pushing the gas prices higher from already elevated levels.
Per GasBuddy, national average gas prices currently stand at $3.47, up 16.5 cents a gallon from a month ago and 97.2 cents a gallon from a year ago. Experts expect gas price to spike to $4 a gallon by early spring after Russia gets hit by sanctions (read: 5 Leveraged Energy ETFs to Play Russia-Ukraine Tensions).
We profiled the above-mentioned ETFs below:
Invesco S&P SmallCap Energy ETF (PSCE - Free Report)
Invesco S&P SmallCap Energy ETF offers exposure to the companies that are principally engaged in producing, distributing or servicing energy-related products, including oil and gas exploration and production, refining, oil services and pipelines. It tracks the S&P Small Cap 600 Capped Energy Index, holding 32 stocks in its basket.
Invesco S&P SmallCap Energy ETF has accumulated $127.8 million in its asset base and charges 29 basis points (bps) in annual fees. It trades in an average daily volume of 496,000 shares and gas a Zacks ETF Rank #3 (Hold).
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report)
First Trust ISE-Revere Natural Gas Index Fund offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 43 stocks in its basket.
First Trust ISE-Revere Natural Gas Index Fund has amassed $523.2 million in its asset base while charging 60 bps in annual fees. Volume is good, with 1.7 million shares exchanged per day on average. The product has a Zacks ETF Rank #3.
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report)
SPDR S&P Oil & Gas Exploration & Production ETF provides exposure to 59 oil and gas exploration and production companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index.
SPDR S&P Oil & Gas Exploration & Production ETF has AUM of $4.2 billion and trades in an average daily volume of 8 million shares. The fund charges 35 bps in fees per year and has a Zacks ETF Rank #3 with a High risk outlook (read: How to Invest in Energy ETFs).
Invesco DWA Energy Momentum ETF (PXI - Free Report)
Invesco DWA Energy Momentum ETF tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies showing relative strength (momentum). The fund has 45 stocks in its basket and AUM of $198.1 million.
Invesco DWA Energy Momentum ETF charges 60 bps in annual fees and trades in a good volume of 121,000 shares a day on average. PXI has a Zacks ETF Rank #3 with a High risk outlook.
Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report)
Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.
Holding 32 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $486.4 million in its asset base and charges 63 bps in annual fees. It has a Zacks ETF Rank #3 with a High risk outlook.