When it comes to investing in energy, there are a variety of options available. Exchange-traded funds (ETFs) are a popular choice for investors looking to gain exposure to the sector. Three of the most popular ETFs are the Invesco Dynamic Energy Exploration & Production ETF (PXE), the iShares U. S.
Oil & Gas Exploration & Production ETF (IEO), and the Energy Select Sector SPDR Fund (XLE). These ETFs have seen impressive returns over the past year, with PXE rising by 72%.PXE is a multi-cap blend fund that tracks the Dynamic Energy Exploration & Production Intellidex Index, which includes around 30 U. companies that explore and produce oil, natural gas, and other resources. Stocks are selected based on factors such as profit momentum, price momentum, quality, management actions, and value.
The portfolio includes companies that refine crude oil into finished products like gasoline, collect and process natural gas, and produce natural gas liquids (NGL). Mid-cap stocks make up the majority of the fund, accounting for more than 38%. The top three holdings are ConocoPhillips (COP), Diamondback Energy Inc., and Chevron Corporation. IEO follows the Dow Jones U. Select Oil Exploration & Production Index, which is composed of U.
shares in the oil and gas exploration and production sector, making up almost three-quarters of its holdings. The ETF is market cap-weighted and also includes refining, marketing, and transportation companies. It follows a blended strategy and invests in a mix of growth and value stocks of various market capitalizations. The top three holdings are ConocoPhillips; EOG Resources Inc., an oil and gas exploration and production company; and Pioneer Natural Resources Co. XLE tracks the Energy Select Sector Index, an index of U.
companies in the oil, gas, and consumable fuels; energy equipment and services; and alternative energy industries. The fund has a low expense ratio and high liquidity, similar to many energy ETFs. More than 90% of its assets are allocated to oil, gas, and consumable fuel companies, with the remainder spread across energy equipment and services companies. Nearly half of XLE's assets are invested in three companies: Exxon Mobil Corporation; Chevron Corporation; and Schlumberger Limited. Green finance is becoming increasingly popular as it supports trillions of dollars in global energy transition initiatives.
Investors should carefully consider all information contained in the prospectus or summary prospectus before investing in any fund or sector, including investment objectives, risks, charges, expenses, and other important information. They should also look into investing in sectors or companies with higher ESG ratings than their industry peers or other investment opportunities. It's important to remember that any investment strategy that pursues objectives beyond tracking a broad market benchmark index may experience periods where ESG investments perform lower or higher than the market as a whole. Each investor should review an investment strategy for their particular situation before making any investment decision. Investors should also be aware that some initiatives have restricted access to certain asset classes or fund managers, limiting Americans' ability to choose their investments and potentially jeopardizing their ability to meet their financial goals such as retirement. In summary, when choosing an energy investment fund it's important to consider all available information before making any decisions. Investors should look into investing in sectors or companies with higher ESG ratings than their industry peers or other investment opportunities while keeping in mind that any investment strategy that pursues objectives beyond tracking a broad market benchmark index may experience periods where ESG investments perform lower or higher than the market as a whole.
