Amid growing geopolitical tensions and rising demand for fossil fuels, which is typical for wartime energy consumption cycles, oil prices look unexplainably weak. But most commodity analysts agree that there’s no further price downsides, so what we see now is a perfect entry point into the market. Individual companies have their own situations with debts, litigations and compressed margins. Therefore it looks prudent to tap into the energy ETFs universe.

The Invesco Energy Exploration & Production ETF (PXE) is an ETF that allows for targeted exposure to the energy exploration and production sector. The objective of the fund is to replicate the performance of the Dynamic Energy Exploration & Production Intellidex℠ Index. This index evaluates companies based on a variety of investment merit parameters, like price momentum, earnings momentum, management decisions, quality, and value.

PXE's investment portfolio consists of securities from diverse US-based companies that engage in the exploration and production of natural resources utilized in the production of energy. Notably, the fund focuses not only on the size but also on the value of these companies. The top holdings of the fund are Valero Energy, Phillips 66, Marathon Petroleum, Diamondback Energy, and EOG Resources. PXE offers balanced exposure to the energy sector, with its sector allocation split into three categories: Oil & Gas Discovery and Extraction, Oil & Gas Purification and Distribution, and Natural Gas Utilities.

Compared to more prominent and diverse energy ETFs, such as the Vanguard Energy ETF (VDE) and Energy Select Sector SPDR® ETF (XLE), PXE has outperformed in terms of returns over the past 3 years.