Three top-performing energy ETFs that have jumped as much as 72% in the past year offer exposure to the sector as the S&P 500 Index slumps and oil and gas prices advance after plunging from their summer highs.
Invesco Dynamic Energy Exploration & Production ETF, the iShares U.S. Oil & Gas Exploration & Production ETF, and the Energy Select Sector SPDR Fund hold oil and natural gas companies as well as alternative energy sector, boosted by billions of dollars in investments.
- Three top energy ETFs outperformed the broader market as well as key oil and natural gas benchmarks over the past year.
- The funds are the Invesco Dynamic Energy Exploration & Production ETF, the iShares U.S. Oil & Gas Exploration & Production ETF, and the Energy Select Sector SPDR Fund.
- The top holding of the first two funds is ConocoPhillips, and the top of the third is Exxon Mobil Corp.
Some 50 energy ETFs trade in the United States, excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM).
The top three funds have outperformed the 13% decline in the S&P 500 Index as well as the 19% increase in the Bloomberg Natural Gas Subindex and 35% gain in the Bloomberg Composite Crude Oil Subindex in the past year as of Nov. 15. They've performed on par with the S&P 500 Energy Sector Index, which is up 71% in the past year.
We examine the top three energy ETFs below. All numbers are as of Nov. 15.
Invesco Dynamic Energy Exploration & Production ETF (PXE)
- Performance Over One Year: 72.1%
- Expense Ratio: 0.63%
- Annual Dividend Yield: 1.69%
- Average Daily Volume: 163,138
- Net Assets: $351.3 million
- Inception Date: Oct. 26, 2005
- Issuer: Invesco
PXE is a multi-cap blended fund that tracks the Dynamic Energy Exploration & Production Intellidex Index, which includes about 30 U.S. companies that explore and produce oil, natural gas, and other resources. The stocks are chosen based on earnings momentum, price momentum, quality, management actions, and value. The portfolio includes companies that refine crude oil into finished products such as gasoline, gather and process natural gas, and produce natural gas liquids (NGL). Mid-cap stocks make up the largest portion at more than 38%.
The top three holdings 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.
iShares U.S. Oil & Gas Exploration & Production ETF (IEO)
- Performance Over One-Year: 70.3%
- Expense Ratio: 0.39%
- Annual Dividend Yield: 1.96%
- Average Daily Volume: 236,674
- Net Assets: $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, which make up almost three-quarters of its holdings. The market-cap-weighted ETF also holds refining, marketing, and transportation companies. 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.
Energy Select Sector SPDR Fund (XLE)
- Performance Over One-Year: 69.5%
- Expense Ratio: 0.10%
- Annual Dividend Yield: 3.75%
- Three-Month Average Daily Volume: 26,432,914
- Assets Under Management: $44.6 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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