ETF Education Report: Invesco Dorsey Wright Energy Momentum ETF (PXI)

What this ETF is trying to do

The Invesco Dorsey Wright Energy Momentum ETF (PXI) focuses on the energy sector. It is designed to follow a "momentum" strategy, which generally means looking for stocks that have been moving in a certain direction. This ETF holds a variety of companies involved in energy, such as oil and gas services or production.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return (how much the share price changed) and total return (the share price change plus any cash paid out to investors).

Based on the data provided:

• Year-to-Date (YTD): The price return is approximately 41.49%, while the total return is approximately 42.67%.

• One-Year: The price return is approximately 33.33%, while the total return is approximately 35.13%.

• Three-Year: The price return is approximately 47.90%, while the total return is approximately 54.72%.

• Five-Year: The five-year total return is approximately 113.12%.

To give you an idea of the price movement, the current price is $63.99. The estimated price from roughly one year ago was approximately $48.00.

Top Holdings:

The ETF holds 49 total companies. Here are some of its largest holdings:

• Marathon Petroleum Corp (6.95%)

• Cheniere Energy Inc (6.04%)

• Targa Resources Corp (5.77%)

• Permian Resources Corp Class A (4.15%)

• Valero Energy Corp (4.15%)

Income and distribution explanation

This ETF pays out cash to investors, known as distributions. The distribution yield is 1.12%. This number describes the cash payments relative to the ETF's price. These distributions usually happen quarterly, and there were 4 payments in the last 12 months. It is important to remember that a distribution yield is not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the ETF decreases significantly over time. StockValueFinder uses an erosion-risk score to measure this risk. For PXI, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown positive price returns and total returns over the one-year, three-year, and five-year periods.

• It has a high income rating grade of "A."

Cons

• The ETF is focused on the energy sector, which can be subject to specific market changes.

• The distribution yield is relatively low at 1.12%.

Beginner takeaway

When studying PXI, it is helpful to look at both the share price and the total return. While the share price shows how the market value of the ETF has moved, the total return includes the extra value gained from cash distributions. This ETF currently shows no signs of price erosion according to its risk score.