Small caps have been strong performers in 2021 as well as energy and value—wrap all three in one fund and you get a dynamic ETF in the Invesco Dynamic Energy Exploration & Production ETF (PXE).

Looking specifically at the Russell 2000 for small cap strength, the index is up 11% for the year. Small caps can make pronounced moves in an uptrend, and in the case of the current economic environment, the upside could be ahead.

“With the economy in full-on recovery mode, U.S. small-cap value stocks stand to benefit significantly, as increased spending flows into various consumer-oriented industries,” a Nasdaq article said.

^RUT Chart

^RUT data by YCharts

In the case of value, the MSCI ACWI Value index is up 12% for the year. Value has been a strong performer in 2021 as more investors have been seeking these opportunities amid the recent stock market volatility.

^MSACWIV Chart

^MSACWIV data by YCharts

In the case of energy, a rebound in oil prices, as well as a heightened interest in renewable energy, have boosted indexes like the Bloomberg Energy Subindex. The index is up almost 30% on the year.

^BNRGS Chart

^BNRGS data by YCharts

Small Cap, Value, and Energy in One ETF

Take all three of these factors and you get a dynamic performer in PXE. The fund is up almost 60% on the year, powered by small cap, value, and energy strength in the first half of 2021.

PXE 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 intellidex.

The intellidex is composed of common stocks of 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.

The Index thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value. The Index is composed of securities of 30 U.S. companies involved in the exploration and production of natural resources used to produce energy.

“Those who believe this methodology has the potential to generate excess returns may find PXE to be the ideal way to access this corner of the U.S. energy market,” an ETF Database analysis suggested.

PXE Chart

PXE data by YCharts

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