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Is Invesco Dynamic Energy Exploration & Production ETF (PXE) a Strong ETF Right Now?
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The Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) was launched on 10/26/2005, 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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PXE has amassed assets over $289.92 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PXE are 0.63%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PXE, it has heaviest allocation in the Energy sector --about 97.40% of the portfolio.
Looking at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 6.34% of total assets, followed by Conocophillips (COP - Free Report) and Devon Energy Corp (DVN - Free Report) .
Its top 10 holdings account for approximately 45.02% of PXE's total assets under management.
Performance and Risk
The ETF has gained about 52.11% and was up about 99.77% so far this year and in the past one year (as of 05/05/2022), respectively. PXE has traded between $14.29 and $30.55 during this last 52-week period.
The fund has a beta of 1.94 and standard deviation of 49.85% for the trailing three-year period, which makes PXE a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Energy Exploration & Production ETF is a reasonable option for investors seeking to outperform the Energy ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $899.42 million in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $6.06 billion. IEO has an expense ratio of 0.42% 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?
The Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) was launched on 10/26/2005, 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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PXE has amassed assets over $289.92 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PXE are 0.63%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PXE, it has heaviest allocation in the Energy sector --about 97.40% of the portfolio.
Looking at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 6.34% of total assets, followed by Conocophillips (COP - Free Report) and Devon Energy Corp (DVN - Free Report) .
Its top 10 holdings account for approximately 45.02% of PXE's total assets under management.
Performance and Risk
The ETF has gained about 52.11% and was up about 99.77% so far this year and in the past one year (as of 05/05/2022), respectively. PXE has traded between $14.29 and $30.55 during this last 52-week period.
The fund has a beta of 1.94 and standard deviation of 49.85% for the trailing three-year period, which makes PXE a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Energy Exploration & Production ETF is a reasonable option for investors seeking to outperform the Energy ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $899.42 million in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $6.06 billion. IEO has an expense ratio of 0.42% 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.