PXE and PXI are both smart beta ETFs. PXE’s underlying index considers companies based on price momentum, earnings momentum, quality, management action, and value, according to PowerShares.
PXI tracks the DWA Energy Technical Leaders Index, which attempts to identify energy sector constituents displaying positive relative strength characteristics. PXE features three refiners among its top 10 holdings while that number is five for PXI.
“Widening refining margins are favorable for refiner stock performance. The chart above shows that refiners (as measured by the S&P 500 Oil & Gas Refining & Marketing Index) have outperformed the energy sector as a whole (S&P 500 Energy Index) over the past 10 years when crack spreads are wide or widening, while falling crack spreads have been a drag on the relative performance of refining shares. That’s because cheaper fuel prices help to stimulate product demand, while ample supplies of oil help lower the cost of production,” according to PowerShares. [Contrarian ETF Ideas for 2015]
PowerShares Dynamic Energy Exploration & Production Portfolio
