Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Invesco DWA Energy Momentum ETF (
PXI Quick Quote PXI - Free Report) , a passively managed exchange traded fund launched on 10/12/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
The fund is sponsored by Invesco. It has amassed assets over $224.08 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. PXI seeks to match the performance of the DWA Energy Technical Leaders Index before fees and expenses.
The Dorsey Wright??Energy Technical Leaders Index identifies companies that are showing relative strength, and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.13%.
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.
This ETF has heaviest allocation in the Energy sector--about 96.20% of the portfolio.
Looking at individual holdings, Ovintiv Inc (
OVV Quick Quote OVV - Free Report) accounts for about 5.35% of total assets, followed by Cheniere Energy Inc ( LNG Quick Quote LNG - Free Report) and Sm Energy Co ( SM Quick Quote SM - Free Report) .
The top 10 holdings account for about 40.19% of total assets under management.
Performance and Risk
Year-to-date, the Invesco DWA Energy Momentum ETF has added about 25.82% so far, and is up roughly 31.16% over the last 12 months (as of 06/23/2022). PXI has traded between $21.98 and $52.86 in this past 52-week period.
The ETF has a beta of 1.71 and standard deviation of 50.73% for the trailing three-year period, making it a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
Invesco DWA Energy Momentum ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PXI is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Energy ETF (
VDE Quick Quote VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF ( XLE Quick Quote XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.57 billion in assets, Energy Select Sector SPDR ETF has $35.37 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%. Bottom Line
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Zacks ETF Center.