Weird ETFs To Buy #5 — PowerShares DWA Energy Momentum ETF
As many E&P firms have embraced fracking with gusto, the energy sector has been a great industry to place you bets on over the last 5 years. But when it comes to returns, only one fund really takes the cake. And no, we’re not talking about the venerable Energy Select Sector SPDR (XLE).
The PowerShares DWA Energy Momentum ETF (PXI) has beaten the pants off the XLE over the past five years — by more than seventy percentage points in total returns.
PXI — which recently underwent a name change — holds a very concentrated portfolio of just 34 energy stocks. The ETF uses various screens to identify companies that are showing relative strength or momentum and weights them accordingly. What investors are treated with is a portfolio of some of the more dynamic and fast moving frackers around. Stalwarts like Exxon Mobil (XOM) aren’t included in the ETF.
That focus on smaller energy firms has helped PXI produce a whopping 170% total return in the past five years. And with the smaller independents still leading the pack, PXI should continue to outperform its rivals going forward.
Expenses for PXI run at 0.66%.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.