Designed to provide broad exposure to the Energy - Broad segment of the equity market, the Invesco S&P SmallCap Energy ETF (PSCE) is a passively managed exchange traded fund launched on 04/07/2010.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $240.24 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. PSCE seeks to match the performance of the S&P SmallCap 600 Capped Energy Index before fees and expenses.
The S&P SmallCap 600 Capped Energy Index is designed to measure the overall performance of common stocks of US energy companies.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.29%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Civitas Resources Inc (CIVI) accounts for about 8.79% of total assets, followed by Helmerich & Payne Inc (HP) and Sm Energy Co (SM).
The top 10 holdings account for about 55.77% of total assets under management.
Performance and Risk
So far this year, PSCE has gained about 8.88%, and is up roughly 16.41% in the last one year (as of 08/16/2023). During this past 52-week period, the fund has traded between $39.35 and $57.55.
The ETF has a beta of 1.98 and standard deviation of 47.06% for the trailing three-year period, making it a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P SmallCap Energy ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PSCE is a reasonable option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.30 billion in assets, Energy Select Sector SPDR ETF has $37.10 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Invesco S&P SmallCap Energy ETF (PSCE): ETF Research Reports
Helmerich & Payne, Inc. (HP) : Free Stock Analysis Report
SM Energy Company (SM) : Free Stock Analysis Report
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
Civitas Resources, Inc. (CIVI) : Free Stock Analysis Report
Vanguard Energy ETF (VDE): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
