Share-split context: A reverse split was recorded on Jul 17, 2023 with coefficient 0.2. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: INVESCO OIL & GAS SERVICES ETF (PXJ)

What this ETF is trying to do

The INVESCO OIL & GAS SERVICES ETF (ticker: PXJ) is an exchange-traded fund that focuses on the oil and gas services industry. Instead of owning just one company, this ETF holds many different companies involved in oil and gas services. Based on the most recent data, its top holdings include Frontline PLC, NOV Inc, and Halliburton Co. Please note that the list of holdings is partial and can change over time.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price change and any cash distributions (dividends) paid out.

For PXJ, the numbers show strong growth:

• Year-to-Date (YTD): The price return is approximately 50.56%, while the total return is approximately 54.03%.

• One Year: The price return was approximately 61.61%, and the total return was approximately 66.76%.

• Three Year: The price return was approximately 52.59%, and the total return was approximately 67.09%.

This ETF has a history of a reverse split. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not increase the actual value of your investment.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. PXJ has a distribution yield of approximately 2.79%. This means the cash distributed is about 2.79% of the current share price. These distributions usually happen quarterly, and there were 4 payouts 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 decline in the Net Asset Value (the actual value of the assets held by the fund). Some investors worry that high payouts might cause the fund's value to shrink over time. However, for PXJ, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown significant positive total returns over the last one, three, and five years.

• It provides a distribution yield for those seeking regular cash payments.

Cons

• The ETF has a history of reverse splits, which is a structural detail investors should monitor.

• As with all sector-specific funds, performance is tied to the oil and gas services industry.

Beginner takeaway

PXJ has shown strong price and total returns recently. When studying this ETF, remember to distinguish between the share price movement (price return) and the overall gain including dividends (total return). Also, keep in mind that while distributions provide cash, they are separate from the growth of the share price itself.