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Should You Invest in the Invesco Dynamic Energy Exploration & Production ETF (PXE)?

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Designed to provide broad exposure to the Energy - Exploration segment of the equity market, the Invesco Dynamic Energy Exploration & Production ETF (PXE) is a passively managed exchange traded fund launched on 10/26/2005.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $288.15 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Exploration segment of the equity market. PXE seeks to match the performance of the Dynamic Energy Exploration & Production Intellidex Index before fees and expenses.

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.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.22%.

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 97.20% of the portfolio.

Looking at individual holdings, Occidental Petroleum Corp (OXY) accounts for about 6.34% of total assets, followed by Conocophillips (COP) and Devon Energy Corp (DVN).

The top 10 holdings account for about 45.02% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Dynamic Energy Exploration & Production ETF has added about 30.53% so far, and was up about 42.44% over the last 12 months (as of 07/05/2022). PXE has traded between $14.29 and $36.33 in this past 52-week period.

The ETF has a beta of 1.96 and standard deviation of 51.12% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dynamic Energy Exploration & Production 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, PXE is an excellent 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.

IShares U.S. Oil & Gas Exploration & Production ETF (IEO) tracks Dow Jones U.S. Select Oil Exploration & Production Index and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) tracks S&P Oil & Gas Exploration & Production Select Industry Index. IShares U.S. Oil & Gas Exploration & Production ETF has $842.52 million in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $4.47 billion. IEO has an expense ratio of 0.42% and XOP charges 0.35%.

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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Invesco Dynamic Energy Exploration & Production ETF (PXE): ETF Research Reports
 
Devon Energy Corporation (DVN) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
 
iShares U.S. Oil & Gas Exploration & Production ETF (IEO): ETF Research Reports
 
SPDR S&P Oil & Gas Exploration & Production ETF (XOP): ETF Research Reports
 
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