PXE Invesco Energy Exploration and Production ETF

Last couple of years have not been very smooth for the global markets. Besides economic troubles in Italy, Spain, Greece and Ireland, sequestration and the fiscal cliff in the U.S. had caused temporary disruptions to the Wall Street rally. However, Wall Street has not looked back since the start of this year.

It appears that as long as the Fed continues with its massive asset purchases, none of the global upheavals can stop the Wall Street advance. In fact, before the recent three-day slide, both the Dow Jones Industrial Average Index and S&P 500 Index inched up to their all-time or multi-year highs. (3 Foreign ETFs Still Beating the S&P 500)

However, after recording the longest winning streak since 1960, the market lost its momentum in the last three days. Banking crisis in the tiny island nation of Cyprus was held culprit for the fall. But like any other European news, the impact of this news on the market will not last long and the Wall Street will again head for an upside.

A number of market sectors have performed remarkably well in the year-to-date period, thanks to widespread market optimism. (Two Sector ETFs Posting Incredible Gains)

Below, we highlight three ETFs which not only have performed remarkably well, but have also led the market in terms of impressive returns.

PowerShares KBW Capital Markets Portfolio (KBWC)

2011 was a rough year for the financial industry in general and especially for the broker-dealer/capital markets segment of the industry. However, the financial sector emerged as one of the top performers in 2012. (Capital Markets ETFs For 2012?

Now with an improving job market, housing recovery and increase in consumer confidence, the capital markets segment is certain to benefit from the positive sentiment. The segment started 2013 with a bang, posting solid gains across the board as strong earnings propelled the segment higher.

The bullish trend is very much obvious from the performance of PowerShares KBW Capital Markets Portfolio (KBWC). KBWC has been one of the solid performers in the year-to-date period recording a robust gain of 14.52%.

The fund manages an asset base of $10.1 million spread across 24 securities. However, the fund trades in weak volumes, so the bid/ask spreads could be pretty wide. Still, the product does have a relatively low fee of just 35 basis points a year.

The fund is not able to minimize company-specific risk as 61.08% of the asset base is invested in the top ten holdings. State Street Corp, Goldman Sachs and Morgan Stanley occupy the top three positions in the fund. (Time to bank on Regional Bank ETFs?)

PowerShares Dynamic Energy Exploration & Production Portfolio (PXE)

PXE represents a good bet to play the strong rebound in the energy sector. Although it’s not as big a name as XLE or IEZ in the same sector, the gains offered by the ETF are much higher than the other two. (Time to Buy Energy ETFs?)

While XLE and IEZ have provided respective returns of 9.34% and 10.14% since the start of 2013, PXE appears to play the strength in the energy sector far better by rewarding investors with a solid gain of 16.6% year to date.

U.S. energy sector did not do so well in early 2012 only to recover in the second half, giving some life to energy ETFs. The sluggishness in the sector was mostly attributable to weakness in the oil market.

However, in 2013, an increased production of oil and mounting oil prices changed the fate of the sector. A significant rise in oil production in the U.S. resulted in global energy firms returning to the U.S market. And it seems that the current boom in oil production will continue to provide a strong boost to energy ETFs. (Time to Buy the Oil Equipment ETFs?)

PXE manages an asset base of $115.8 million and provides exposure to 31 securities. Despite the strong gains provided by the ETF, it appears that the product is not much popular among investors as indicated by its trading volumes of just 19,800 shares a day.

This may be due to the expense ratio being on the higher side of the category average. The fund charges a fee of 60 basis points on an annual basis.

With a concentration level of 46.4% in the top ten holdings, the fund appears to be moderately spread across the companies. Among individual holdings, Southwestern Energy Company, Marathon Petroleum Corp and Phillips 66 occupy the top three positions in the fund.

SPDR S&P Transportation ETF (XTN)

The first half of 2012 also did not go well for transportation companies and ETFs, as weakness in the global market resulted in lower demand for industrial goods. However, the transportation industry showed some signs of recovery in the second half of 2012.

And when the global economy chugged along in 2013, leading to improved demand for industrial equipment, the transportation industry appeared to have benefited the most. In fact, improvement in the global GDP growth rate should also continue to strengthen the airline, railroads and shipping companies. (A Technical Take on Industrial ETFs with ISM Data Release)

Since the start of 2013, XTN has exhibited a very strong performance and it appears that with increasing demand for industrial goods, the ETF should continue with its outperformance for the rest of the year.

In the year-to-date period, XTN has delivered a return of 21.7%. The fund manages an asset base of $36.1 million and invests this asset base in a portfolio of 40 securities. XTN charges a fee of 35 basis points annually.

The fund’s concentration in the top ten holdings stands at 34.3% with US Airways Group Inc, Avis Budget Group and Swift Transn Co occupying the first three positions in the fund.

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PWRSH-KBW CMP (KBWC): ETF Research Reports
 
PWRSH-DYN ENRG (PXE): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
SPDR-SP TRANSPT (XTN): ETF Research Reports
 
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