The Invesco Dynamic Energy Exploration & Production ETF (PXE) is among the top performing ETFs year to date.
PXE has returned 49.9% year to date and 9.8% over one month, according to VettaFi. During the same period, the fund has taken in $77 million in net inflows, totaling $270 million in assets under management. The fund charges a 63 basis point expense ratio.
At its 2022 high, on June 7, the fund had returned 87.7%, before a major sell-off across energy stocks occurred, which sent stock prices across the sector downhill. Supported by strong growth in July, the fund has since rebounded to its mid-May valuation and the momentum for the industry is not expected to subside.
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, according to VettaFi.
PXE can be useful as a tactical overlay or as part of a sector rotation strategy. PXE is part of the suite of Intellidex products from PowerShares, meaning that this ETF is linked to an index designed to outperform traditional cap-weighted benchmarks.
The index thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value, according to Invesco.
The index is composed of securities of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy. These companies are engaged principally in the exploration, extraction, and production of crude oil and natural gas from land-based or offshore wells. These companies include petroleum refineries that process the crude oil into finished products, such as gasoline and automotive lubricants, and companies involved in gathering and processing natural gas and manufacturing natural gas liquid.
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