Investors looking to capture advances in oil and gas prices following a drop from summer highs may look to three top-performing oil and gas company ETFs which have climbed by as much as 73% in the last year.
Invesco Dynamic Energy Exploration & Production ETF, iShares U.S. Oil & Gas Exploration & Production ETF, and Energy Select Sector SPDR Fund all target oil and gas stocks, rather than the commodities themselves or related futures contracts.
- The energy significantly outperformed the broader market over the past year, fueled by Russia's invasion of Ukraine, inflation, and other forces.
- Three top energy ETFs outperformed the broader market in the last year.
- These funds are Invesco Dynamic Energy Exploration & Production ETF, iShares U.S. Oil & Gas Exploration & Production ETF, and Energy Select Sector SPDR Fund.
- The top holding of the first two of these funds is ConocoPhillips, while the top holding of the third is Exxon Mobil Corp.
There are 30 oil and gas stock ETFs that trade in the U.S., excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). The oil and gas sector, as measured by the S&P 500 Energy sector index, has dramatically outperformed the broader market, posting a total return of 69.8% over the past 12 months compared with the S&P 500 Index’s total return of -14.4%, as of Nov. 18, 2022. We examine the top three oil and gas ETFs below. The figures below are as of Nov. 17, 2022.
- Performance Over One-Year: 73.2%
- Expense Ratio: 0.63%
- Annual Dividend Yield: 1.69%
- Three-Month Average Daily Volume: 165,823
- Assets Under Management: $352.1 million
- Inception Date: Oct. 26, 2005
- Issuer: Invesco
PXE seeks to track the Dynamic Energy Exploration & Production Intellidex index, which is composed of 30 U.S. companies involved in the exploration and production of natural resources used in energy production. The companies within the index are selected based on various investment merit criteria, including price and earnings momentum, quality, management action, and value. The ETF normally invests at least 90% of its assets in the securities comprising the index and provides exposure to companies engaged in the exploration, extraction, and production of crude oil and natural gas. It includes petroleum refineries, companies that gather and process natural gas, and those that manufacture natural gas liquid (NGLs). The fund follows a blended strategy of investing in a mix of growth and value stocks of various market capitalizations.
The top three holdings of PXE are ConocoPhillips (COP), Diamondback Energy Inc. (FANG), and Marathon Petroleum Corp. (MPC). The first two explore and produce oil, gas and other resources, and the third is a downstream energy company focused on refining, marketing and transportation.
- Performance Over One-Year: 70.9%
- Expense Ratio: 0.39%
- Annual Dividend Yield: 1.96%
- Three-Month Average Daily Volume: 235,429
- Assets Under Management: $1.3 billion
- Inception Date: May 1, 2006
- Issuer: BlackRock Financial Management
IEO tracks the Dow Jones U.S. Select Oil Exploration & Production Index, which is comprised of U.S. equities within the oil and gas exploration and production sector. The market-cap-weighted ETF provides exposure to companies engaged in the exploration, production, and distribution of oil and gas. Exploration and production companies receive the largest exposure at about three quarters of assets, followed by companies involved in oil and gas refining, marketing, and transportation and in oil and gas storage and transportation. The fund follows a blended strategy, investing in a mix of growth and value stocks of various market caps.
The top three holdings for IEO are ConocoPhillips; EOG Resources Inc. (EOG), an oil and gas exploration and production company; and Pioneer Natural Resources Co. (PXD), a hydrocarbon exploration company.
- Performance Over One-Year: 68.7%
- Expense Ratio: 0.10%
- Annual Dividend Yield: 3.75%
- Three-Month Average Daily Volume: 26,499,240
- Assets Under Management: $44.0 billion
- Inception Date: Dec. 16, 1998
- Issuer: State Street
XLE targets the Energy Select Sector Index, an index of U.S. companies in the oil, gas and consumable fuel, energy equipment and services industries. The fund has a low expense ratio and high liquidity, similar to many energy ETFs. More than 90% of the fund's assets are allocated to oil, gas, and consumable fuels companies, with the rest spread among energy equipment and services companies.
Almost half of XLE's assets are invested in three companies, Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), and Schlumberger Ltd. (SLB). The first two of these are oil and gas exploration and production companies, while the third is an oilfield services company.
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