Invesco’s energy-focused funds have seen huge gains so far this year as oil prices have soared. The Invesco DB Oil Fund (DBO) is up nearly 31% year-to-date, while the Invesco Dynamic Energy Exploration & Production ETF (PXE) and the Invesco Dynamic Oil & Gas Services ETF (PXJ) are each up roughly 45% since the beginning of the year.
DBO provides an opportunity to get exposure to the current upside in oil prices. Additionally, investors don’t hold direct exposure to the heavy price volatility of holding positions directly in the commodity itself.
DBO seeks to track the DBIQ Optimum Yield Crude Oil Index Excess Return (DBIQ-OY CL ER), which is intended to reflect the changes in market value of crude oil. The single index commodity consists of light, sweet crude oil. The fund invests in futures contracts to track its corresponding index.
PXE, meanwhile, seeks to track the investment results of the Dynamic Energy Exploration & Production Intellidex Index. The fund invests at least 90% of its total assets in the securities that comprise the underlying index.
According to the analyst report on ETF Database, PXE “offers exposure to the exploration and production sub-sector of the domestic energy market, making it a potentially useful tool for those looking to target stocks of companies responsible for discovering and accessing new deposits of oil and gas.”
Finally, PXJ seeks to track the investment results of the Dynamic Oil Services Intellidex Index. The exchange traded fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index.
The underlying index is composed of common stocks of U.S. companies that assist in the production, processing, and distribution of oil and gas. The fund is up a healthy 37% thus far in 2021.
“PXJ is likely too targeted for those with a long-term focus but can be useful as a tactical overlay or as part of a sector rotation strategy,” said analysis from ETF Database. And like DBO and PXE, “PXJ is part of the suite of Intellidex product from PowerShares, meaning that this ETF is linked to an index designed to outperform traditional cap-weighted benchmarks. Those who believe this methodology has the potential to generate excess returns may find PXJ to be the ideal way to access this corner of the U.S. energy market.”
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