Invesco Energy Exploration & Production ETF (ARCA: PXE)

Invesco Energy Exploration & Production ETF (ARCA:PXE), Top Holdings

Invesco Dynamic Energy Exploration &Production ETF

PowerShares Dynamic Energy E&P

Energy

The Fund generally will invest at least 90% of its total assets in securities that comprise the Underlying Index. The underlying Index is composed of common stocks of U.S. companies involved in the exploration and production of natural resources used to produce energy. These companies are engaged principally in exploration, extraction and production of crude oil and natural gas from land-based or offshore wells.

Marathon Oil Corp.

Phillips 66

Eog Resources Inc

Diamondback Energy Inc.

Valero Energy Corp.

Marathon Petroleum Corp.

Devon Energy Corp.

Coterra Energy Inc

National Fuel Gas Co

Cnx Resources Corp

Invesco Energy Exploration & Production ETF

Houston,,Texas,,Usa,-,April,13,,2024:,Marathon,Oil,Corporation

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iShares Dow Jones US Oil & Gas Exploration & Production Index Fund

PowerShares ETF Trust Dynamic Energy Exploration & Production Port

RSPG

WEEI

ConocoPhillips and Marathon Oil received Second Request from FTC for merger; expected to be completed in Q4 2024 pending approvals and stockholder approval.

ConocoPhillips-Marathon Merger Hits Hurdle: FTC Requests More Info, Delays Deal

Sector ETFs

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ETFs

If you&#39;re interested in broad exposure to the Energy - Exploration segment of the equity market, look no further than the iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS: IEO), a passively managed exchange traded fund launched on 05/01/2006.

Should You Invest in the iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF?

Devon Energy, Shutterstock

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Buybacks

Devon Energy shares down after $5 billion acquisition of Grayson Mill Energy&#39;s Williston Basin business. Expected to boost production and free cash flow, reduce debt, and increase dividends. 

Devon Energy Drills Down On Growth: $5B Deal Expands Williston Basin Presence

On Thursday, ConocoPhillips (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) and Marathon Oil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) received a Second Request from the Federal Trade Commission (FTC) to extend the Hart-Scott-Rodino waiting <a target="_blank" href="https://conocophillips.gcs-web.com/static-files/48fdfddc-3020-433e-8e81-d7adc6782eec" rel="noreferrer noopener">period</a>.
The merger will proceed after the FTC review and fulfillment of other conditions in the merger agreement.
ConocoPhillips and Marathon are working with the FTC on its review and expect the merger to be completed in the fourth quarter of 2024, pending regulatory approvals and Marathon stockholder approval.
In May, ConocoPhillips disclosed a definitive deal to acquire Marathon Oil in an all-stock transaction with an&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/05/39061149/conocophillips-acquires-marathon-oil-in-all-stock-deal-at-14-7-premium-details" rel="noreferrer noopener">enterprise value of $22.5 billion</a>.
This acquisition is anticipated to add over 2 billion barrels of resource with an estimated average point forward cost of supply of less than $30 per barrel WTI to ConocoPhillips&#8217; existing U.S. onshore portfolio.
Investors can gain exposure to COP via&nbsp;IShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IEO#BATS">IEO</a>) and&nbsp;Westwood Salient Enhanced Energy Income ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WEEI#NASDAQ">WEEI</a>).
Investors can gain exposure to MRO via&nbsp;Invesco Energy Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXE#NYSE">PXE</a>) and Invesco S&amp;P 500 Equal Weight Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSPG#NYSE">RSPG</a>).
Also Read: <a target="_blank" href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/39095128/conocophillips-set-for-growth-with-marathon-oil-acquisition-analysts-anticipate-acc" rel="noreferrer noopener">ConocoPhillips Set For Growth With Marathon Oil Acquisition: Analysts Anticipate Accretive Financials And Enhanced Asset Base</a>
Price Action: COP shares are down 0.62% at $113.28, and MRO is down 0.70% at $28.41 at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by JHVEPhoto via Shutterstock
Read next:
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<li><a href="https://www.benzinga.com/markets/equities/24/05/39106916/conocophillips-squeeze-trinidad-court-reportedly-oks-1-3b-claim-against-venezuela" target="_blank" rel="noreferrer noopener">ConocoPhillips Squeeze: Trinidad Court Reportedly OKs $1.3B Claim Against Venezuela</a></li>
</ul>

If you&#39;re interested in broad exposure to the Energy - Exploration segment of the equity market, look no further than the iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/ieo#BATS">IEO</a>), a passively managed exchange traded fund launched on 05/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $731.59 million, making it one of the larger ETFs attempting to match the performance of the Energy - Exploration segment of the equity market. IEO seeks to match the performance of the Dow Jones U.S. Select Oil Exploration &amp; Production Index before fees and expenses.
The Dow Jones U.S. Select Oil Exploration &amp; Production Index is a free-float adjusted market capitalization-weighted index. The Index includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF&#39;s expense ratio.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.61%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Conocophillips&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>) accounts for about 18.30% of total assets, followed by EOG Resources Inc&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>) and Marathon Petroleum Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mpc#NYSE">MPC</a>).
The top 10 holdings account for about 70.58% of total assets under management.
Performance and Risk
So far this year, IEO has gained about 6.79%, and was up about 19.10% in the last one year (as of 07/08/2024). During this past 52-week period, the fund has traded between $85.58 and $111.94.
The ETF has a beta of 1.44 and standard deviation of 31.75% for the trailing three-year period, making it a high risk choice in the space. With about 49 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Oil &amp; Gas Exploration &amp; Production ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IEO is an excellent option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Energy Exploration &amp; Production ETF (ARCA:PXE) tracks Dynamic Energy Exploration &amp; Production Intellidex Index and the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (ARCA:XOP) tracks S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index. Invesco Energy Exploration &amp; Production ETF has $133.33 million in assets, SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF has $3.43 billion. PXE has an expense ratio of 0.60% and XOP charges 0.35%.
<a href="https://www.zacks.com/stock/news/2297706/should-you-invest-in-the-ishares-u-s-oil-gas-exploration-production-etf-ieo?cid=CS-BENZ-FT-sector_etf-2297706">To read this article on Zacks.com click here.</a>

Should You Invest in the iShares U.S. Oil & Gas Exploration & Production ETF?

Devon Energy Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DVN#NYSE">DVN</a>) shares are trading lower today. The company disclosed a definitive agreement to acquire Grayson Mill Energy&#8217;s <a target="_blank" href="https://www.benzinga.com/pressreleases/24/07/g39663117/devon-energy-announces-strategic-acquisition-in-the-williston-basin-and-expands-share-repurchase-a" rel="noreferrer noopener">Williston Basin business for $5 billion</a>.
The acquisition price comprises $3.25 billion in cash and $1.75 billion in stock. The acquisition includes 500 gross locations and 300 high-quality refrac candidates, extending Devon&#8217;s inventory life in the basin to up to 10 years with three operated rigs.
The deal, subject to customary conditions and price adjustments, is expected to close by the end of the third&nbsp;quarter of 2024 and become effective on June 1, 2024.
Outlook: The transaction is anticipated to immediately accretive to Devon&#8217;s key per-share financial metrics, including earnings, cash flow, free cash flow, and net asset value.
Post-deal closure, the company expects oil production to average 375,000 barrels of oil per day, with total production averaging 765,000 barrels of oil equivalent (Boe) daily across its diversified asset portfolio.
The transaction significantly enhances Devon&#8217;s position in the Williston Basin, adding 307,000 net acres (70% working interest).
Production from these properties is expected to remain around 100,000 Boe per day (55% oil) in 2025.
With increased scale, Devon anticipates up to $50 million in annual cash flow savings from operational <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">efficiencies and marketing synergies</a>.
The transaction supports Devon&#8217;s strong investment-grade credit ratings, targeting a net debt-to-EBITDAX ratio of about 1.0 times at closing. Devon plans to allocate up to 30% of annual free cash flow to reduce $2.5 billion in debt over the next two years.
Share Repurchase &amp; Dividend: Given the transaction&#8217;s positive impact on free cash flow, Devon&#8217;s board of directors has increased its share repurchase authorization by 67% to $5 billion through mid-year 2026.
Additionally, the company anticipates the acquisition to enhance its dividend payout starting in 2025 and beyond.
As of the end of the first quarter of FY24, Devon&#8217;s cash, cash equivalents, and <a target="_blank" href="https://www.benzinga.com//node/38564057" rel="noreferrer noopener">restricted cash were $1.15 billion.</a>
Devon anticipates reporting results for the second quarter of <a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">2024&nbsp;on August 6, 2024</a>.
Investors can gain exposure to the stock via&nbsp;Invesco Energy Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXE#NYSE">PXE</a>) and Invesco S&amp;P 500 Equal Weight Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSPG#NYSE">RSPG</a>).
Price Action: DVN shares are down 2.78% at $45.72 at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

The SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (ARCA:XOP) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor &amp; Index
The fund is managed by State Street Global Advisors, and has been able to amass over $3.66 billion, which makes it one of the largest ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index.
The S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index represents the oil and gas exploration and production sub-industry portion of the S&amp;P Total Markets Index. The S&amp;P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Oil &amp; Gas Exploration Index is a modified equal weight index.
Cost &amp; Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.31%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it&#39;s still important for investors to research a fund&#39;s holdings.
XOP&#39;s heaviest allocation is in the Energy sector, which is about 100% of the portfolio.
Taking into account individual holdings, Valero Energy Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vlo#NYSE">VLO</a>) accounts for about 2.70% of the fund&#39;s total assets, followed by Pbf Energy Inc Class A (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pbf#NYSE">PBF</a>) and Apa Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/apa#NYSE">APA</a>).
The top 10 holdings account for about 26.52% of total assets under management.
Performance and Risk
The ETF has gained about 8.27% and is up roughly 20.54% so far this year and in the past one year (as of 06/13/2024), respectively. XOP has traded between $121.68 and $160.59 during this last 52-week period.
The fund has a beta of 1.70 and standard deviation of 35.95% for the trailing three-year period, which makes XOP a high risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco Energy Exploration &amp; Production ETF (ARCA:PXE) tracks Dynamic Energy Exploration &amp; Production Intellidex Index and the iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/ieo#BATS">IEO</a>) tracks Dow Jones U.S. Select Oil Exploration &amp; Production Index. Invesco Energy Exploration &amp; Production ETF has $140.05 million in assets, iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF has $754.21 million. PXE has an expense ratio of 0.60% and IEO charges 0.40%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
<a href="https://www.zacks.com/stock/news/2287626/is-spdr-s-p-oil-gas-exploration-production-etf-xop-a-strong-etf-right-now?cid=CS-BENZ-FT-smart_beta_etf-2287626">To read this article on Zacks.com click here.</a>

Commodities

Is SPDR S&P Oil & Gas Exploration & Production ETF a Strong ETF Right Now?

Diamondback Energy, Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FANG#NASDAQ">FANG</a>) shares are trading higher after it penned a deal with&nbsp;Energy Transfer&nbsp;LP&nbsp;(NYSE:&nbsp;ET) to sell&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/05/g39036921/diamondback-energy-inc-announces-sale-of-wtg-midstream" rel="noreferrer noopener">WTG Midstream Holdings LLC</a>.
Energy Transfer&nbsp;LP&nbsp;is acquiring WTG Midstream from affiliates of Stonepeak, the Davis Estate&nbsp;and&nbsp;Diamondback Energy in a transaction&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/05/b39036623/energy-transfer-to-acquire-wtg-midstream-in-a-3-25-billion-transaction" rel="noreferrer noopener">valued at approximately $3.25 billion</a>.
The transaction&#8217;s consideration comprises $2.45 billion in cash and approximately 50.8 million newly issued Energy Transfer&nbsp;common&nbsp;units.
The buyout&nbsp;is expected&nbsp;to boost Energy Transfer&#8217;s natural gas pipeline and processing network in the Permian Basin.
The acquisition comprises eight gas processing plants (~1.3 Bcf/d), two more under construction (~0.4 Bcf/d) assets&nbsp;and&nbsp;a 20% stake in BANGL Pipeline.&nbsp;
Energy Transfer is expected to benefit from&nbsp;well positioned&nbsp;assets in the Permian,&nbsp;which is&nbsp;the most active region in the&nbsp;U.S.
The deal&nbsp;is projected&nbsp;to close in the third quarter of 2024, subject to regulatory approval and customary closing conditions.
Synergy: The deal is anticipated to add incremental revenue from downstream NGL transportation and fractionation fees. Energy Transfer expects the WTG assets to add around $0.04 of Distributable Cash Flow (DCF) per common unit in 2025, which is expected to grow to about <a href="https://www.benzinga.com/calendars/guidance" target="_blank" rel="noreferrer noopener">$0.07 per common unit in 2027</a>. 
Diamondback Energy expects a total pre-tax consideration net of approximately&nbsp;$375 million, subject to customary closing conditions and adjustments. Proceeds from the transaction will&nbsp;be used&nbsp;to reduce debt associated with the&nbsp;<a target="_blank" href="https://www.benzinga.com//node/38469997" rel="noreferrer noopener">pending Endeavor Energy Resources,&nbsp;L.P.&nbsp;merger.</a>
As of March-end, Energy Transfer&#8217;s&nbsp;adjusted&nbsp;Distributable Cash Flow attributable to partners&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/05/b38712725/energy-transfer-reports-strong-first-quarter-2024-results" rel="noreferrer noopener">stood&nbsp;at $2.36 billion</a>.
Investors can gain exposure to FANG stock via&nbsp;Texas Capital&nbsp;Funds Trust Texas Capital Texas Oil Index ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILT#NYSE">OILT</a>) and&nbsp;Invesco Energy&nbsp;Exploration &amp; Production ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXE#NYSE">PXE</a>).
Price Action: FANG shares are up 1.89% at $197.11 at the last check Tuesday.
Photo via Shutterstock

Asset Sales

FANG

OILT

Energy Transfer Expands Permian Presence With $3.25B Acquisition: Details

Chesapeake Energy Corporation&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CHK#NASDAQ">CHK</a>) disclosed that its merger with&nbsp;Southwestern Energy Company&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SWN#NYSE">SWN</a>) is expected be delayed as the FTC requested additional information and documentary materials from both&nbsp;<a target="_blank" href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=318219359&amp;type=PDF&amp;symbol=CHK&amp;cdn=7522e3bd074a83a74031b4ac5e509362&amp;companyName=Chesapeake+Energy+Corporation&amp;formType=8-K&amp;dateFiled=2024-04-05" rel="noreferrer noopener">companies</a>.
Consequently, Chesapeake and Southwestern now expects the merger to be completed in the second half of 2024. Earlier, the companies expected the deal to close in the second quarter of 2024.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/24/04/38097984/drilling-deep-analyst-outlines-chesapeake-merger-synergies-delays-due-to-regulatory-risks" rel="noreferrer noopener">Drilling Deep: Analyst Outlines Chesapeake Merger Synergies, Delays Due To Regulatory Risks</a>
The issuance of the second request extends the waiting period imposed by the HSR Act until 30 days after the companies have substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC.&nbsp;
In January 2024, both companies inked a merger deal through an all-stock transaction valued at $7.4 billion, or $6.69 per share, based on Chesapeake&#8217;s closing price&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/01/36591781/why-southwestern-energy-shares-are-down-today" rel="noreferrer noopener">on January 10, 2024</a>.
At this exchange ratio and the respective share prices on January 10, 2024, the combined company would have an enterprise value<a target="_blank" href="https://www.benzinga.com/markets/equities/24/01/36521132/southwestern-energy-and-chesapeake-energy-near-17b-merger-report" rel="noreferrer noopener">&nbsp;of around $24 billion</a>.&nbsp;
Related:&nbsp;<a target="_blank" href="https://www.benzinga.com/analyst-ratings/analyst-color/24/01/36617282/chesapeake-energys-strategic-merger-with-southwestern-energy-wins-analyst-endorseme" rel="noreferrer noopener">Chesapeake Energy&#8217;s Strategic Merger with Southwestern Energy Wins Analyst Endorsement: Upgraded Ratings and Anticipated Market Dominance</a>
Investors can gain exposure to the stock via&nbsp;Invesco Energy Exploration &amp; Production ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXE#NYSE">PXE</a>) and&nbsp;Texas Capital Funds Trust Texas Capital Texas Oil Index ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILT#NYSE">OILT</a>).&nbsp;
Price Action: CHK shares are down 0.10% at $89.23 on the last check Friday.
Photo via Shutterstock

Hitch in the Haymaker: FTC Request Delays Chesapeake-Southwestern Merger

Keybanc Capital Market&nbsp;analyst&nbsp;Tim Rezvan&nbsp;initiated coverage on&nbsp;Chesapeake Energy Corporation&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CHK#NASDAQ">CHK</a>)&nbsp;<a target="_blank" href="https://www.benzinga.com/quote/CHK/analyst-ratings" rel="noreferrer noopener">at Sector Weight rating</a>.
The rating reflects the near/medium-term outlook for natural gas. The analyst says management is acting prudently by curtailing production amid weak prices.&nbsp;
The analyst writes that significant synergies can be extracted from the Southwestern merger and believes management is proving to&nbsp;be a first-mover with its push to gain exposure to international natural gas benchmarks for 15%-20% of its marketed gas.&nbsp;
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37244616/natural-gas-price-rallies-after-chesapeake-energy-lowers-output" target="_blank" rel="noreferrer noopener">Natural Gas Price Rallies After Chesapeake Energy Lowers Output</a>
However, the analyst sees legitimate regulatory risks related to the&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/01/36591781/why-southwestern-energy-shares-are-down-today" rel="noreferrer noopener">Southwestern merger</a>.&nbsp;
Also, Rezvan is concerned about degradation trends in the Marcellus and the Haynesville assets.
The analyst says the continuing delays on LNG export projects, L48 volume growth, and higher gas volumes from mature&nbsp;oil shale basins create less certainty that prices are expected to reset higher as LNG exports double to 25+ Bcf/d, possibly by 2028.
Overall, the analyst estimates EBITDA of $3.180 billion (26% above cons.) for 2024 and $5.182 billion ( 6% above street view) for 2025.
Investors can gain exposure to the stock via&nbsp;Invesco Energy Exploration &amp; Production ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PXE#NYSE">PXE</a>) and&nbsp;Texas Capital Funds Trust Texas Capital Texas Oil Index ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OILT#NYSE">OILT</a>).
Price Action: CHK shares are down 0.34% at $89.99 on the last check Thursday.
Related: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/01/36617282/chesapeake-energys-strategic-merger-with-southwestern-energy-wins-analyst-endorseme" target="_blank" rel="noreferrer noopener">Chesapeake Energy&#8217;s Strategic Merger with Southwestern Energy Wins Analyst Endorsement: Upgraded Ratings and Anticipated Market Dominance</a>
Image: Shutterstock

Drilling Deep: Analyst Outlines Chesapeake Merger Synergies, Delays Due To Regulatory Risks

If you&rsquo;ve taken a look at the Dow Jones, Nasdaq or S&amp;P 500 lately, you probably didn&rsquo;t see a pretty picture. They are all taking a beating and with economists fretting about a potential recession, it&rsquo;s beginning to look like this bear market will continue for quite some time.
Add that to runaway inflation and record-high gas prices, and it&rsquo;s easy to see why investors are racing for the exit doors while also looking for <a href="https://www.benzinga.com/money/best-alternative-investment-platforms/">alternative investments</a> for their cash. What alternative investments could work? If you&rsquo;re in this situation and not sure where to go, take a look at this list of Benzinga&rsquo;s favorite alternative investment exchange-traded funds (ETFs).
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</ul>
&nbsp;
<h2>Invesco Dynamic Energy Exploration and Production ETF (PXE)</h2>
Commodities have long been one of the most popular alternative investments, and it&rsquo;s not hard to understand why when you take a look at oil and gas prices. From an investor&rsquo;s perspective, the good thing about oil is that it&rsquo;s going to be sold regardless of how well the stock market performs.
The Invesco Dynamic Energy Exploration and Production ETF (NYSEARCA: PXE) fund comprises 30 different companies that are actively drilling for oil and natural gas and searching out new places to find these valuable resources. The fund managers have chosen a solid mix of value and growth stocks, which include some of the following companies:
<ul>
<li>Occidental Petroleum Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>)</li>
<li>Marathon Petroleum Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mpc#NYSE">MPC</a>)</li>
<li>EOG Resources Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>)</li>
</ul>
<h2>United States Oil Fund (USO)</h2>
Anyone who has filled up their car with gas lately is definitely feeling the bite from increased oil prices. External factors, most notably the Russian invasion of Ukraine, have roiled the oil markets and pushed prices above $150 per barrel. It&rsquo;s still uncertain how high the price of oil will go, but while it&rsquo;s this high, an ETF that is tied to the price of oil could be a solid investment option.
Enter the United States Oil Fund (NYSEARCA: USO), which concentrates on buying and selling oil futures. That means USO profits are not contingent on securing permits to build new rigs then hoping those rigs actually operate. In the case of USO, as long as oil prices are this high, investors are likely to see strong returns.&nbsp;
<h2>Vanguard Real Estate Fund (VNQ)</h2>
Real estate is perhaps the oldest and most respected of all the options in the alternative investment pool. Why? The answer is simple. Real estate lets investors have the chance to earn passive income while the property appreciates. It also offers investors significant tax benefits.
The Vanguard Real Estate Fund (NYSEARCA: VNQ) is a compelling mix of equity in some of the most successful real estate investment companies and development firms in the country. Highlights of the Vanguard fund include the following:
<ul>
<li>Avalon Bay Communities Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/avb#NYSE">AVB</a>): nationwide property management group</li>
<li>Simon Property Group Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spg#NYSE">SPG</a>): nationally known shopping mall operator</li>
<li>American Tower Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/amt#NYSE">AMT</a>): nationally known telecommunications tower owners</li>
</ul>
The beauty of the Vanguard fund is that it gives investors a diverse portfolio of real estate assets that they can profit from without having to choose or manage them.
&nbsp;
Don&rsquo;t miss Benzinga&#39;s coverage on Alternative Real Estate Investments:
<ul>
<li><a href="https://www.benzinga.com/real-estate/22/06/27844953/jeff-bezos-backed-real-estate-investment-platform-acquires-another-23-million-worth-of-single-family">Jeff Bezos-Backed Arrived Homes Acquires Another $23 Million Worth Of Single-Family Rental Homes As Number Of Active Investors Doubles</a></li>
<li><a href="https://www.benzinga.com/real-estate/reit/22/04/26801540/this-reit-youve-probably-never-heard-of-has-paid-a-dividend-above-8-for-the-last-5-years">This REIT You&#39;ve Probably Never Heard of Has Paid a Dividend Above 8% For The Last 5 Years</a></li>
<li><a href="https://www.benzinga.com/real-estate/22/06/27800385/how-fundrises-flagship-real-estate-fund-is-beating-the-stock-market">This Non-Listed Real Estate Fund Continues To Outperform Publicly Traded REITs</a></li>
</ul>
Or browse current investment options based on your criteria with <a href="https://www.benzinga.com/alternative-investments">Benzinga&rsquo;s Offering Screener</a>
&nbsp;
<h2>GraniteShares Gold Trust (BAR)</h2>
No list of alternative investment ETFs would be complete without a precious metals option. The price of gold has been on a upward march for decades now, and as the stock market continues to show bearish tendencies, gold can be a solid bet for investors looking to ride out the storm.
However, for many investors, the problem with buying gold is making sure that they&rsquo;re actually investing in gold bars. Many of the invest-in-gold pitches you see on TV are bait-and-switch operations that purport to offer gold but pressure you into buying gold coins instead of actual gold bullion.
The GraniteShares Gold Trust (NYSEARCA: BAR) is tied to the performance of gold bullion, not coins. That means investors in this ETF are actually buying shares of gold and not coins which are only partly composed of gold. Another obvious advantage of investing in BAR is the fact that investors can buy gold without having to find a safe place to store it. The GraniteShares Gold Trust is backed by a large tranche of gold bullion, which is stored in a secure vault in London, England.
<h2>Global X SuperIncome Preferred Fund (SPFF)</h2>
Holding stock in companies can be a lot like ordering single malt whisky in a bar. It may all be single malt, but not all single malt is created equally. That highly aged stuff up on the top shelf tastes a whole lot better. Preferred stock is like top-shelf whisky.
You can hold common stock in a company that appreciates, but the payout you get from that is nothing like the payout that preferred shareholders receive. Almost all preferred shares include a provision for what is known as a fixed dividend. This fixed dividend basically guarantees the shareholder a payout, one which is usually much larger than most common stock payouts.
Why don&rsquo;t more investors buy preferred shares? For the same reason you don&rsquo;t order Macallan 21 or Johnnie Walker Blue Label at your local watering hole. If they even have it, the chances are pretty good it will be too rich for your blood. But wouldn&rsquo;t it be nice if there was an ETF that only included preferred shares?
The Global X SuperIncome Preferred Fund (NYSEARCA: SPFF) does exactly that. SPFF investors get the benefit of a carefully selected mix of preferred shares and the fixed dividends those shares provide. The fund&rsquo;s managers focus investor capital almost exclusively on the preferred shares that consistently pay out the highest dividends.&nbsp;
<h2>How do you Know Which ETF is Right for You?</h2>
Every investor&#39;s needs are different, and so is their financial situation. Choosing which ETF is right for you depends on things like your investment goals, how much capital you have to invest and how much risk you can stand. Regardless of your individual answers to these questions, it&rsquo;s a good idea to consult with a financial advisor before participating in an offering.
Although the performance of alternative investments may not necessarily be tied to that of the stock market, they aren&rsquo;t can&rsquo;t-miss investments. The risk of loss is always present. If you find an alternative ETF that fits your investor profile, now might be a great time to buy in.
Photo by&nbsp;<a href="https://www.shutterstock.com/g/designer491">Vitalii Vodolazskyi</a>&nbsp;on Shutterstock

Specialty ETFs

Real Estate

SPFF

Top ETFs To Gain Access To Alternative Investments

Due to the coronavirus outbreak, a slew of companies are making negative earnings revisions and the carnage isn&#39;t limited to withdrawn guidance by some big name technology companies.
Some exchange traded funds have large concentrations of components that are making downward revisions. For example, the Amplify Advanced Battery Metals and Materials ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/batt#NYSE">BATT</a>) downbeat earnings revision tally is close to 48%, <a href="https://www.etfrc.com/index.php">according to the ETF Research Center</a>.
&ldquo;Estimate revisions are an important metric we monitor because they tell us how the analysts who follow companies the closest are changing their thinking,&rdquo; says ETFRC. &ldquo;Analysts being an optimistic bunch, they tend to overestimate a company&#39;s earnings at the start of each year, so negative estimate revisions as the year progresses are normal and widespread.&rdquo;
Here are three other ETFs chock full of negative earnings guidance.
See Also: <a href="https://www.benzinga.com/trading-ideas/long-ideas/20/02/15418441/3-safe-etfs-if-a-stock-market-correction-comes-calling">3 Safe Harbor ETFs</a>
<h3>First Trust NYSE Arca Biotechnology Index Fund (FBT)</h3>
Investors thinking the coronavirus would be a salve for biotechnology stocks and ETFs have learned a hard lesson and the First Trust NYSE Arca Biotechnology Index Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fbt#NYSE">FBT</a>) has proved as much. FBT, one of the largest biotech ETFs, is lower by almost 6% over the past week, far worse than 4.15% shed by the NASDAQ Biotechnology Index over the same period.
The negative earnings revision tally for FBT is 35%, second only to BATT.
<h3>Invesco Dynamic Energy Exploration &amp; Production ETF (PXE)</h3>
The only thing surprising about the inclusion of the Invesco Dynamic Energy Exploration &amp; Production ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pxe#NYSE">PXE</a>) on this list is that there are several ETFs in between it and the worst spot. The downbeat earnings revision tally for the moribund PXE is 17.2%, according to ETFRC.
The fund is down 17.73% over the past week and almost 35% year-to-date and entered Thursday 47.2% below its 52-week high. As <a href="https://finviz.com/quote.ashx?t=PXE&amp;ty=c&amp;ta=1&amp;p=d">the chart indicates</a>, PXE is in a death spiral.
<h3>First Trust Natural Gas ETF (FCG)</h3>
Death spiral part II with the First Trust Natural Gas ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fcg#NYSE">FCG</a>), which is to say don&#39;t be fooled by the 4.34% yield on this fund. If the 14.4% negative earnings revisions doesn&#39;t scare an investor away, the 35% year-to-date decline should.
Following FCG&#39;s close at $7.83 on Wednesday, further losses from here make a reverse split a very real possibility.

Earnings

Short Ideas

BATT

First Trust NYSE Arca Biotechnology Index Fund

First Trust ISE-Revere Natural Gas Index Fund

3 ETFs Chock Full Of Companies With Negative Earnings Revisions

Energy stocks and exchange-traded funds are rebounding off their previous lows, but the sector remains the worst-performing group in the S&amp;P 500 this year. Problems for the broader energy sector include lagging exploration and production stocks.
The SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>), the largest ETF dedicated to exploration and production stocks, is down 17.2 percent year to date, a loss that is more than twice as bad as basic, diversified energy ETFs. The PowerShares Dynamic Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) has been less bad with a year-to-date loss of 9.1 percent.
PXE&#39;s methodology is clearly proving superior to competing exploration and production ETFs, but there are myriad issues facing the exploration and production group, requiting ambitious investors be patient with related stocks and ETFs.
<h3>Mediocre Math</h3>
Some market observers believe some of the math pertaining to exploration and production is less than compelling.
&ldquo;Energy companies have generally not offered a high level of cash flow return on their invested capital (CFROI),&rdquo;<a href="https://www.blog.invesco.us.com/math-on-ep-stocks-exploration-production-sector"> according to Invesco research</a>. &ldquo;The average E&amp;P stock has delivered an annual CFROI of about 3 percent on average since 1955. That pales in comparison to the average stock in the S&amp;P 500, which has delivered a 9% CFROI on average over the same period.&rdquo;
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10111252/a-solid-start-for-this-new-etf">Fast Start For A New ETF</a>
To that point, PXE could be a better bet among exploration and production because the fund seeks out stocks with quality, steady management and earnings momentum. Since inception, PXE&#39;s underlying index is up 3.5 percent compared to a gain of 0.8 percent for the S&amp;P Oil &amp; Gas Exploration &amp; Production Index.
<h3>Looking For Value </h3>
With the exploration and production space still scuffling, there could be some value opportunities for <a href="https://www.benzinga.com/investing/best-robo-advisors/">prescient investors</a>.
&ldquo;Within this long-term trend, there have been times when &mdash; at the bottom of an energy cycle &mdash; value investors could identify a few E&amp;P stocks that were selling at deep discounts to their reserve values, and could make money for a few years in spite of the industry&rsquo;s lack of capital discipline,&rdquo; said Invesco. &ldquo;That is, until this cycle. Today, E&amp;P companies have reached a new level of capital irresponsibility, and most are actually generating negative returns and losing money for their shareholders &mdash; making that historical 3 percent return actually look good in comparison.&rdquo;
PXE allocates a combined 15 percent of its weight to Devon Energy Corp (NYSE: <a class="ticker" href="/stock/dvn#NYSE">DVN</a>), ConocoPhillips (NYSE: <a class="ticker" href="/stock/cop#NYSE">COP</a>) and Anadarko Petroleum Corporation (NYSE: <a class="ticker" href="/stock/apc#NYSE">APC</a>).
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10098155/is-it-finally-time-for-oil-etfs-to-shine">Time For Oil ETFs to Rally?</a>

Long Ideas

Being Patient With E&P ETFs

This year has been an investment banker&#39;s dream as mergers and acquisitions has soared, with the healthcare sector leading the way. However, beaten up equity prices coupled with slumping oil prices could spur increased takeover activity in the energy patch.

	That theory may be on its way to becoming as various media outlets reported Sunday evening that Apache Corporation&nbsp;(NYSE: <a class="ticker" href="/stock/apa#NYSE">APA</a>) spurned a takeover offer from an unidentified suitor.

	&quot;The Houston-based company rejected the initial offer and is working with financial adviser Goldman Sachs Group Inc. on defense, said the people, who asked not to be identified because deliberations are private. The potential buyer, who could not immediately&nbsp;be identified, sent a letter to Apache in the past few weeks and it&rsquo;s unclear whether talks will resume, one of the people said,&quot; according to a&nbsp;<a href="http://www.bloomberg.com/news/articles/2015-11-08/apache-said-to-get-takeover-approach-for-18-billion-oil-company">Bloomberg report</a>.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5967263/for-etf-investors-its-all-about-yellen">For ETF Investors, It&#39;s All About Yellen</a>

	Apache, once the largest U.S.-based independent oil and natural gas producer, has seen its shares slump nearly 47 percent over the past two years, leaving the company with a market value of $18 billion at last Friday&#39;s close. Over the same period, the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>), the&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5903952/be-careful-when-catching-natural-gas-falling-knives">largest energy ETF</a>, is down 16.4 percent.

	News of a potential Apache takeover could have a profound impact on several ETFs. After all, more than 60 ETFs hold Apache shares.
<h3>
	ETF Plays</h3>

	At the top of the list in terms of percentage allocation to Apache is the Market Vectors Unconventional Oil &amp; Gas ETF (NYSE: <a class="ticker" href="/stock/frak#NYSE">FRAK</a>). FRAK, which tracks the Market Vectors Global Unconventional Oil &amp; Gas Index (MVFRAKTR), allocates 5.2 percent of its weight to Apache making the stock the ETF&#39;s fifth-largest holding.

	The $47.7 million FRAK is home to 57 stocks, though only a small amount of those names, primarily Occidental Petroleum Corp. (NYSE: <a class="ticker" href="/stock/oxy#NYSE">OXY</a>) and EOG Resources Inc. (NYSE: <a class="ticker" href="/stock/eog#NYSE">EOG</a>), could be seen as credible suitors for Apache. Occidental could afford Apache, but that marriage might not make sense because Occidental has no offshore operations and Apache does.

	The PowerShares Dynamic Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) has a 4.8 percent Apache weight, making the stock the ETF&#39;s seventh-largest holding. PXE is a smart beta ETF that evaluates holdings based &quot;price momentum, earnings momentum, quality, management action, and value,&quot; according to <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PXE&amp;title=powershares-dynamic-energy-exploration-production-portfolio">PowerShares</a>.&nbsp;

	Anything is possible, but PXE is home to just 30 stocks with an average market value of just $14 billion, statistics that imply the chances of Apache&#39;s suitor hailing from this ETF are small.

	Due in large part to its above-average <a href="http:// http://www.benzinga.com/trading-ideas/long-ideas/15/08/5803679/how-you-can-follow-warren-buffett-into-phillips-66-with-these">exposure to refining stocks</a>, PXE has been less bad than many rival energy ETFs over the past two years with a loss of just under 15 percent.

Rumors

Pre-Market Outlook

FRAK

These ETFs Should Like The Apache Takeover Rumor

Warren Buffett&#39;s Berkshire Hathaway Inc. (NYSE: <a class="ticker" href="/stock/brk-a#NYSE">BRK-A</a>) has gas and plenty of it, by way of a $4.5 billion stake in Phillips 66 (NYSE: <a class="ticker" href="/stock/psx#NYSE">PSX</a>), the largest U.S. oil refiner.

	That means Nebraska-based Berkshire is now the largest shareholder in Phillips 66, owning more than 58 million shares of the refiner, up from a stake of 7.5 million shares at the end of the first quarter. Berkshire&#39;s increased stake in Phillips 66, which was spun off from ConocoPhillips (NYSE: <a class="ticker" href="/stock/cop#NYSE">COP</a>) in 2012, comes at a time when lower oil prices are helping refiners sharply outperform the rest of the downtrodden energy sector.

	Lower oil prices reduce crack spreads, which work in favor of refiners. Investors can play that theme while following the Oracle of Omaha into shares of Phillips 66 with several ETFs with health weights to the refining giant.

	Related Link: <a href="http://www.benzinga.com/news/15/08/5803457/united-states-just-had-its-biggest-weekly-drop-in-gas-prices-of-2015">United States Just Had Its Biggest Weekly Drop In Gas Prices Of 2015</a>
<h3>
	Oil Refiners</h3>

	The Market Vectors Oil Refiners ETF (NYSE: <a class="ticker" href="/stock/crak#NYSE">CRAK</a>), which debuted on August 19, is the first dedicated refiners ETF. CRAK tracks the Market Vectors Global Oil Refiners Index (MVCRAKTR). That index is cap-weighted, giving CRAK one of the largest weights to Phillips 66 of any ETF. Coming into Monday, the stock was CRAK&#39;s largest holding at a weight of 8.6 percent.

	Refiners benefit when oil prices slide due to lower crack spreads, perhaps the inspiration for CRAK&#39;s ticker, and the few ETFs with robust refiners exposure have been <a href="http://www.benzinga.com/news/earnings/15/08/5768881/oil-retail-and-more-this-weeks-etfs-to-watch">noticeably less bad </a>this year than traditional equity-based energy sector counterparts.

	Highlighting refiners&#39;&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5777744/the-one-energy-etf-that-makes-sense-right-now">sensitivity to higher oil prices</a>, CRAK is off about 4 percent since coming to market because oil futures have surged over that period.
<h3>
	Oil &amp; Gas E&amp;P</h3>

	The $411.7 million iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/ieo#NYSE">IEO</a>) is another ETF with a healthy weight to Phillips 66. IEO has a weight of 8.4 percent to the stock, making it the ETF&#39;s third-largest. IEO is not a dedicated refiners fund, but its 26 percent weight to downstream companies is well above that of standard energy ETFs. Including Phillips 66, IEO has four refiners among its top 10 holdings.

	That does not mean IEO is perfect, it just means the ETF has been less bad than traditional energy ETFs. IEO is down 14.9 percent year-to-date while the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) is off 16.3 percent.

	Speaking of less bad among energy ETFs this year, that is exactly what the PowerShares Dynamic Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) has been with a loss of 8.4 percent. Prior to CRAK&#39;s debut, PXE was a suitable stand-in for a refiners ETF with its three largest holdings, including Phillips 66 in the second spot, being refiners.

	The $84.2 million PXE&#39;s 30 holdings are selected &ldquo;based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value,&rdquo; according to <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PXE">PowerShares</a>.

New ETFs

Intraday Update

BRK-A

CRAK

How You Can Follow Warren Buffett Into Phillips 66 (With These Three ETFs)

U.S. stocks finished last week with modest gains, but those modest gains belie what was a wild week on Wall Street. Stocks surged last Monday, even with oil slumping to a six-year low. Then came news out of China that the central bank there moved to devalue the yuan.
That news sent shockwaves through global financial markets, in particular, through already vulnerable emerging markets. As for exchange-traded funds investors should be closely monitoring this week, there are plenty to choose from. Starting with the embattled energy sector is a fine idea.
<h3>Energy</h3>
It would be easy to highlight obvious funds, including the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) and the Energy Select Sector SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>), the largest equity-based energy ETF. All USO did last week was lose nearly 4 percent on its way to touching another all-time low on Friday. Give XLE some credit. It managed a weekly gain of almost 3 percent.
The ETF is, however, still down 12.4 percent year-to-date and enters Monday trading at its lowest levels in three years. While investors continue piling into XLE in search of value and a bottom, another energy ETF that merits consideration is the PowerShares Dynamic Energy Explor. (ETF) (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>).
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5767756/all-of-a-sudden-this-staples-etf-is-a-hotbed-for-activist-inv">All Of A Sudden, This Staples ETF Is A Hotbed For Activist Investors</a></bzrelatedlink>
Down 3.6 percent this year, PXE has been less bad than rival energy funds and the primary reason why, an advantage the ETF has already <a href="http://www.etftrends.com/2015/04/why-this-energy-etf-has-been-durable/">gotten some credit</a> for, is its robust exposure to refiners. Without a dedicated refiners ETF on the market yet, PXE makes for an adequate proxy on the stocks that actually benefit when oil prices are low.
Sticking with the energy theme for a moment, it is worth pointing out that the First Trust ISE Revere Natural Gas (ETF) (NYSE: <a class="ticker" href="/stock/fcg#NYSE">FCG</a>) was one of the top-performing, non-leveraged ETFs last week with a gain of 6.7 percent, as natural gas prices found some relief.
FCG remains an ETF that should be approached with caution. It is home to several of the <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5740690/why-this-gas-etf-is-getting-smoked">worst performing S&amp;P 500 stocks,</a> and one week is not enough to reverse the bear trend in natural gas.
<h3>Retail</h3>
While it may feel as though earnings is winding down (it sort of is), retail earnings kick into high gear this week with plenty of the 104 stocks in the SPDR S&amp;P Retail (ETF) (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>) slated to deliver results. The $1.11 billion XRT is an equal-weight ETF, so none of its holdings on an individual basis chart the fund&#39;s course.
However, in concert, apparel retailers are significant drivers of XRT&#39;s returns, because that industry is nearly 24 percent of the ETF&#39;s weight. XRT is up less than 1 percent this year.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5767659/well-look-at-that-gold-miners-etfs-try-to-bounce-back">Well, Look At That: Gold Miners ETFs Try To Bounce Back</a></bzrelatedlink>
<h3>Gold</h3>
	It is hard to have a conversation about ETFs to watch without gold forcing its way in. Perhaps the SPDR Gold Trust (ETF) (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) merits its place at the table after jumping 1.7 percent last week, a gain fueled in part by the aforementioned yuan devaluation.
	The hedge fund community is displaying split affinity for gold and GLD. For example, John Paulson&#39;s Paulson &amp; Co., long the largest GLD shareholder, trimmed its stake in the ETF in the second quarter. On the other hand, Stan Druckenmiller&rsquo;s family office added a GLD stake worth almost $324 million at the end of the <a href="http://www.bloomberg.com/news/articles/2015-08-14/duquesne-adds-to-facebook-sells-illumina-buys-spdr-gold-fund">second quarter</a>.

Oil, Retail And More: This Week's ETFs To Watch

Big winners (up at least 5%): PowerShares DB Gold Double Short ETN (NYSE: <a class="ticker" href="/stock/dzz#NYSE">DZZ</a>), ProShares UltraShort Silver (NYSE: <a class="ticker" href="/stock/zsl#NYSE">ZSL</a>), Direxion Daily Gold Miners Bear Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>) and the iPath Global Carbon ETN (NYSE: <a class="ticker" href="/stock/grn#NYSE">GRN</a>).

	Big losers (down at least 5%): Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>), Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>), iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>), Global X Gold Explorers ETF (NYSE: <a class="ticker" href="/stock/gldx#NYSE">GLDX</a>) and the VelocityShares 3x Inverse Natural Gas ETN (NYSE: <a class="ticker" href="/stock/dgaz#NYSE">DGAZ</a>).

	Unusual volume (at least 5X ADV): iShares S&amp;P Asia 50 ETF (NYSE: <a class="ticker" href="/stock/aia#NYSE">AIA</a>), WisdomTree Europe SmallCap Dividend Fund (NYSE: <a class="ticker" href="/stock/dfe#NYSE">DFE</a>), Global X Social Media Index ETF (NYSE: <a class="ticker" href="/stock/socl#NYSE">SOCL</a>), iShares NYSE Composite ETF (NYSE: <a class="ticker" href="/stock/nyc#NYSE">NYC</a>), PowerShares Gldn Dragon Halter USX China ETF (NYSE: <a class="ticker" href="/stock/pgj#NYSE">PGJ</a>) and the PowerShares Dynamic Energy Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>).

	Must reads of the day

	From J.C. Parets: <a href="http://allstarcharts.com/is-it-time-to-get-back-in-japan/?utm_source=dlvr.it&amp;utm_medium=twitter">An important technical view on DXJ</a>.

	You'll never guess which stocks dominate <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3907169/guess-what-stocks-are-leading-the-cloud-computing-etf">the cloud computing ETF</a>.

	From Barron's: Currency-hedged <a href="http://blogs.barrons.com/focusonfunds/2013/09/12/currency-hedged-funds-the-next-big-thing/">ETFs look like the new black</a>.

	For those long Eurozone stocks and ETFs, <a href="http://www.bloomberg.com/news/2013-09-12/germany-s-bonds-rise-for-second-day-before-italy-auctions-debt.html">read this</a>.

	Some new <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/09/3909229/some-new-etfs-off-to-impressive-starts">ETFs to snack on</a>.

Broad U.S. Equity ETFs

Emerging Market ETFs

Currency ETFs

After-Hours Center

WisdomTree Trust WisdomTree Europe SmallCap Dividend

DGAZ

DUST

Market Vectors ETF Trust Market Vectors Gold Miners

GLDX

NUGT

PowerShares Golden Dragon Halter USX China Portfolio

SOCL

Benzinga's Mandatory ETF Reading for September 12, 2013

It has been said the S&amp;P 500's ascent to what feels like a string of never ending new highs has been a rally short on risk-taking and <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/03/3447304/risk-on-rally-these-etfs-say-no">long on low beta fare</a>.

	At the sector level, and it is sectors that lead equity markets not vice versa, there are signs risk is coming back into style.

	Energy is one of the higher beta sectors that has been showing signs of promise. In the past month, the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>), the largest energy ETF by assets, has surged 10.3 percent and is showing signs of a major technical breakout.

	Chris Kimble of Kimble Charting Solutions notes XLE just cleared horizontal resistance and now resides <a href="http://stocktwits.com/message/13696989">about 10 percent from its 2008 highs</a>. Interestingly, Tuesday's for NYMEX-traded oil was just under $96 per barrel. In other words, oil futures are nowhere close to being just 10 percent below the 2008 highs.

	XLE is not the only equity-based energy ETF that has broken out is or on the cusp of doing so. Here are a few more ETF ideas for an ongoing energy sector rally.

	PowerShares Dynamic Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) 
	By the standards of many energy ETFs such as XLE, PXE is small with just about $111 million in assets under management. A few months ago, we warned <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3335720/small-etf-naysayers-at-it-again-in-2013">that was the wrong way of looking at things</a>.

	PXE is proving that assessment accurate as the ETF has jumped over 12 percent in the past month. This is not a cap-weighted ETF, so investors do not need to worry about excessive weightings to the energy sector's usual suspects such as Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>). PXE's top four holdings – Southwestern Energy (NYSE: <a class="ticker" href="/stock/swn#NYSE">SWN</a>), Occidental Petroleum (NYSE: <a class="ticker" href="/stock/oxy#NYSE">OXY</a>), ConocoPhillips (NYSE: <a class="ticker" href="/stock/cop#NYSE">COP</a>) and Murphy Oil (NYSE: <a class="ticker" href="/stock/mur#NYSE">MUR</a>) – sport weights ranging from five to 5.7 percent of the ETF's weight.

	In terms of breakouts, PXE recently cleared horizontal resistance at $32 and the next up leg will come when the ETF cracks $34.

	First Trust ISE-Revere Natural Gas Index Fund (NYSE: <a class="ticker" href="/stock/fcg#NYSE">FCG</a>) 
	Rebounding natural gas futures <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/05/3608927/a-docile-etf-for-the-nat-gas-surge">have been a boon for</a> for FCG in recent weeks as the ETF's 12 percent gain in the past month has helped it clear a downtrend line that dates back to last September. FCG, which has $455.5 million in assets under management, now has a clear runway to attack its 52-week high around $18.70.

	While FCG does offer ample exposure to oilier stocks such as Apache (NYSE: <a class="ticker" href="/stock/apa#NYSE">APA</a>) and Anadarko (NYSE: <a class="ticker" href="/stock/apc#NYSE">APC</a>), many of the fund's 26 other holdings still produce more natural gas than oil. That translates to FCG having a noticeable correlation to natural gas futures. That is good when natural gas prices are rising as they have been recently, but presents a risk to investors if gas prices tumble.

	Market Vectors Unconventional Oil &amp; Gas ETF (NYSE: <a class="ticker" href="/stock/frak#NYSE">FRAK</a>) 
	With just $15.8 million in assets, FRAK is by far the smallest ETF mentioned here, but the ETF's diminutive status belies its solid performance. Helped <a href="http://www.benzinga.com/media/cnbc/13/05/3549537/etfs-are-the-safe-way-to-occidental-exposure">in part by its 8.5 percent weight to</a> Occidental, FRAK has gained just over 11 percent in the past month.

	That has enabled the ETF to clear horizontal resistance at $26 and FRAK is now working on clearing the $26.50, which is roughly the area at which the ETF was priced at when it came to market in February 2012. Occidental, Anadarko and EOG Resources (NYSE: <a class="ticker" href="/stock/eog#NYSE">EOG</a>) combine for about 23 percent of FRAK's weight.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Futures

Technicals

These Energy ETFs Are Breaking Out

A prominent theme among ETF industry observers from 2012 has, unfortunately, remained in play in 2013. That being the ongoing attacks on, criticism of and fear-mongering pertain to ETFs with small assets under management tallies and low average daily volume.

Incorrect interpretations of ETF liquidity have started to border on dangerous. For example, one noted commentator recently said he prefers the iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) over the WisdomTree Japan Hedged Equity Fund (NYSE: <a class="ticker" href="/stock/dxj#NYSE">DXJ</a>). 

As <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3318084/etf-showdown-settling-the-japan-debate">has been noted</a>, that deeply flawed logic has proven costly.

DXJ itself is large with over $3.6 billion in AUM and robustly traded with average daily turnover north of 1.9 million shares. In other words, it is not the type of ETF experts would tell investors to stay away from on the basis of size.

Still, just as some banks are "too big to fail," many professional and retail investors see some ETFs as "too small to embrace." In this case, it pays to remember the famous quote from the late New York Senator Daniel Patrick Moynihan "You are entitle to your own opinion, but you are not entitled to your own facts."

Fact is over 140 ETFs and ETNs have delivered year-to-date returns of 10 percent or more, according to Finviz data. Plenty of members of that group are well-known, heavily traded names such as DXJ and the iShares Dow Jones US Home Construction Index Fund (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>). Others are not. Here are a few examples of what assets/volume crowd have missed out on in 2013.

SPDR S&amp;P Transportation ETF
Yes, the popular iShares Dow Jones Transportation Average Index Fund (NYSE: <a class="ticker" href="/stock/iyt#NYSE">IYT</a>) has a rival and it is the unheralded SPDR S&amp;P Transportation ETF. To be fair, XTN is up just under 10 percent year-to-date with a gain of 9.87 percent, but that is good enough to be about 80 basis points ahead of IYT. 

XTN is home to more stocks with 38 compared to 21 for IYT and that means the SPDR fund is home to smaller transportation names.

However, the two funds <a href="https://www.spdrs.com/product/fund.seam?ticker=XTN">have many of the same holdings</a>, but IYT still has average daily volume that is about 100 times that of XTN's. Still, long-term investors should note XTN has been the better performer over the past two years and it is the cheaper of the two ETFs with an expense ratio of 0.35 percent compared to 0.46 percent for IYT.

iShares Dow Jones U.S. Broker-Dealers Index Fund (NYSE: <a class="ticker" href="/stock/iai#NYSE">IAI</a>)
With scores of ETFs tracking the financial services sector on the market today, it is not surprising that a few go overlooked. Such is life for the iShares Dow Jones U.S. Broker-Dealers Index Fund. 

On the surface, IAI is an ETF the critics should love to hate. It has just $71.2 million in assets under management, a small sum for an ETF that is nearly six years old, and it trades less than 42,000 shares per day.

A deeper look shows it is hard to call IAI an "illiquid" ETF. Of the ETF's top-10 holdings, which represent over 59 percent of its weight, Raymond James (NYSE: <a class="ticker" href="/stock/rjf#NYSE">RJF</a>) is the least heavily traded with average daily turnover of almost 651,000 shares. Ignoring IAI's underlying liquidity means investors have missed out on an almost 16 percent year-to-date gain.

PowerShares Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>)
The PowerShares Energy Exploration &amp; Production Portfolio is a dichotomy of sorts. With nearly $107 million in assets, it meets the much lauded $100 million in AUM watermark that so many folks look for. On the other hand, PXE's average daily volume is less than 47,000 shares. 

With an expense ratio of 0.65 percent, PXE is pricier than larger rivals such as the Vanguard Energy ETF (NYSE: <a class="ticker" href="/stock/vde#NYSE">VDE</a>) and the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>). However, PXE <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2663422/four-obscure-sector-etfs-outperforming-bigger-rivals">has a penchant for outperforming those ETFs</a>. 

Over the past two years, PXE has surged almost 21 percent, giving the fund a stunning out-performance over XLE and VDE.

That trend has continued in 2013 as PXE is up nearly 14 percent. VDE is higher by just 7.1 percent.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

WisdomTree Trust Japan Total Dividend Fund

iShares Dow Jones US Broker Dealers Index Fund

iShares Dow Jones US Homenstruction Index Fund

iShares Dow Jones Transportation Average Index Fund

Small ETF Naysayers at it Again in 2013

<div class="entry-content">

		The Energy sector ranks fifth out of the ten sectors as detailed in my <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">sector rankings for ETFs and mutual funds</a>. It gets my Neutral rating, which is based on aggregation of ratings of 20 ETFs and 79 mutual funds in the Energy sector as of October 10, 2012. Prior reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

		Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the sector. Not all Energy sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 23 to 173), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst ETFs and mutual funds, which allocate too much value to Neutral-or-worse-rated stocks.

		To <a href="http://blog.newconstructs.com/2012/10/09/how-to-find-the-best-etfs-2/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the Energy sector, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

		Investors should not buy any Energy ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this sector, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees. Active management has a <a href="http://blog.newconstructs.com/2012/09/17/less-than-1-of-managers-deliver-alpha-here-are-details/">long history</a> of not paying off.

		Get my ratings on all ETFs and mutual funds in this sector on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d859086114e11e1b10100188b533b34">mutual fund and ETF screener</a>.
<div>

			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4709" height="235" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig1.jpg" title="EnergyFig1" width="333" /></a>

		* Best ETFs exclude ETFs with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		PowerShares Dynamic Energy E&amp;P (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) is excluded from Figure 1 because its total net assets (TNA) are below $100 million and do not meet our liquidity standards.
<div>

			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4708" height="235" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig2.jpg" title="EnergyFig2" width="333" /></a>

		* Best mutual funds exclude funds with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		ICON Funds: ICON Energy Fund (NYSE: <a class="ticker" href="/stock/icenx#NYSE">ICENX</a>) and (NYSE: ICEEX) is excluded from Figure 2 because its total net assets (TNA) are below $100 million and do not meet our liquidity standards.

		Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) is my top-rated Energy ETF and AIM Sector Funds: Invesco Energy Fund (NYSE: IENIX) is my top-rated Energy mutual fund. Both earn my Neutral rating.

		Direxion Daily Natural Gas Related Bull 3x Shares (NYSE: <a class="ticker" href="/stock/gasl#NYSE">GASL</a>) is my worst-rated Energy ETF and Saratoga Advantage Trust: Energy and Basic Materials Portfolio (NYSE: SBMBX) is my worst-rated Energy mutual fund. Both earn my Very Dangerous rating.

		Figure 3 shows that 58 out of the 286 stocks (over 42% of the total net assets) held by Energy ETFs and mutual funds get an Attractive-or-better rating. However, no Energy ETFs or Energy mutual funds get an Attractive-or-better rating.

		The takeaways are: mutual fund managers allocate too much capital to low-quality stocks and Energy ETFs hold poor quality stocks.
<div>

			Figure 3: Energy Sector Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4707" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig3.jpg" title="EnergyFig3" width="405" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Investors need to tread carefully when considering Energy ETFs and mutual funds, as no ETFs or Energy mutual funds in the Energy sector allocate enough value to Attractive-or-better-rated stocks to earn an Attractive rating. Focus on individual stocks instead.

		Chevron Corporation (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) is one of my favorite stocks held by Energy ETFs and mutual funds and earns my Attractive rating. CVX currently trades at a steep discount to its no-growth value; its <a href="http://blog.newconstructs.com/2012/06/18/price-to-economic-book-value-or-price-to-ebv/">price-to-economic book value</a> is .60, which implies that the market believes CVX&rsquo;s profitability will permanently decline by 40%. Over the past ten years, CVX&rsquo;s <a href="http://www.newconstructs.com/nc/help/glossary.htm">invested capital</a> has grown 131%. At the same time, CVX&rsquo;s <a href="http://www.newconstructs.com/nc/help/glossary.htm">NOPAT</a> has grown 397%. Growth in operating profits (NOPAT) coupled with asset efficiency creates value for equity holders. Rather than investing in an energy fund where only a portion of the investment will go towards Attractive stocks like CVX, investors should focus on allocating to the specific stocks that earn an Attractive or better rating.

		Range Resources Corp (NYSE: <a class="ticker" href="/stock/rrc#NYSE">RRC</a>) is one of my least favorite stocks held by Energy ETFs and mutual funds and earns my Dangerous rating. RRC&rsquo;s <a href="http://www.newconstructs.com/nc/help/glossary.htm">ROIC</a> of 3.5% places it in the bottom third of the 3000+ companies we cover. This relatively low ROIC means RRC has had a negative <a href="http://www.newconstructs.com/nc/help/glossary.htm">economic earnings margin</a> twelve out of the past fourteen years. To justify RRC&rsquo;s current stock price, RRC must grow its <a href="http://www.newconstructs.com/nc/help/glossary.htm">NOPAT</a> 20% compounded annually for the next 25 years. These high market expectations along with low real earnings power make RRC a Dangerous stock.

		170 stocks of the 3000+ I cover are classified as Energy stocks, but due to style drift, Energy ETFs and mutual funds hold 286 stocks.

		Figures 4 and 5 show the rating landscape of all Energy ETFs and mutual funds.

		Our <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">Sector Rankings for ETFs &amp; Mutual Funds</a> report ranks all sectors and highlights those that offer the best investments.
<div>

			Figure 4: Separating the Best ETFs From the Worst ETFs
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4706" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig4.jpg" title="EnergyFig4" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>
<div>

			Figure 5: Separating the Best Mutual Funds From the Worst Mutual Funds
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4705" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/EnergyFig5.jpg" title="EnergyFig5" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d859086114e11e1b10100188b533b34">full list</a> of ratings and rankings along with reports on all 20 ETFs and 79 mutual funds in the Energy sector.

		Disclosure: I receive no compensation to write about any specific stock, sector or&nbsp;theme.
</div>

GASL

ICENX

Best & Worst ETFs & Mutual Funds: Energy Sector

One of the biggest stories in the financial markets this week has been the precipitous decline of oil futures. The United States Oil Fund (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>), which tracks West Texas Intermediate futures, lost 7.4 percent in the first three trading days of the week. That slide includes a 4.1 percent tumble on volume that was more than twice the daily average on Wednesday.

The United States Brent Oil Fund (NYSE: <a class="ticker" href="/stock/bno#NYSE">BNO</a>), which tracks the global benchmark contract, was off 7.6 percent through Wednesday. BNO gave up 3.6 percent on volume that was more than triple the daily average on Wednesday.

Clearly, it has been a tough week for the oil bulls, but some equity-based energy ETFs are showing some fortitude in the face of sour headlines. That is to say these ETFs are performing at a rate that is less bad than rival funds. The two "standouts" share one thing in common: Higher exposure to refining equities than is found in many other energy ETFs.

Traders Guy Adami and Joe Terranova both spoke positively about the refiners with Adami particularly bullish on Valero (NYSE: <a class="ticker" href="/stock/vlo#NYSE">VLO</a>), <a href="http://www.cnbc.com/id/49093984">according to CNBC</a>.

The trade makes sense when crude prices are too high, demand erodes and refining margins are suppressed. Additionally, hedging oil futures at elevated prices increases input costs for refiners, but if oil prices extend recent declines the refiners will benefit from lower input costs.

With no ETF devoted exclusively to refining names, investors looking to get exposure to multiple stocks in this sub-sector will want to consider two ETFs. The IndexIQ Global Oil Small Cap ETF (NYSE: <a class="ticker" href="/stock/ioil#NYSE">IOIL</a>) is home to several U.S.-based and international refiners. Tesoro (NYSE: <a class="ticker" href="/stock/tso#NYSE">TSO</a>) and Sunoco (NYSE: <a class="ticker" href="/stock/sun#NYSE">SUN</a>) are the ETFs' third- and fourth-largest holdings, respectively, combining for about 16 percent of the fund's weight.

Refining exposure has not been a silver bullet for IOIL, but the prominence of Tesoro and Sunoco within the ETF is hard to ignore. So is the fact that since the start of the week, while down, has outperformed the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>) and the iShares Dow Jones US Oil Equipment Index Fund (NYSE: <a class="ticker" href="/stock/iez#NYSE">IEZ</a>).

By name alone, the PowerShares Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>) would sound like an ETF destined to fall during this rough patch for crude and it has. PXE is off 3.4 percent this week, but that is a better run than XOP's. 

PXE's top-10 holdings include three pure-play refiners – Phillips 66 (NYSE: <a class="ticker" href="/stock/psx#NYSE">PSX</a>), Valero and Marathon Petroleum (NYSE: <a class="ticker" href="/stock/mpc#NYSE">MPC</a>). Those names combine for 15 percent of the fund's weight. Further down PXE's roster, five more refiners are found, including Tesoro, Sunoco and Holly Frontier (NYSE: <a class="ticker" href="/stock/hfc#NYSE">HFC</a>). Overall, more than a quarter of PXE's weight is devoted to pure-play refiners. 

That combined with heavy exposure to integrated oil stocks should keep PXE performing better than XOP or the iShares Dow Jones U.S. Oil &amp; Gas Exploration &amp; Production Index Fund (NYSE: <a class="ticker" href="/stock/ieo#NYSE">IEO</a>) even as oil prices slide.

For more on refiners and ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2829120/3-etfs-for-resurgent-refiners">here</a>.

CNBC

iShares Dow Jones US Oil Equipment & Services Index Fund

IOIL

Refiner-Heavy ETFs Outperforming During Oil's Slump

Following a May-June decline that left many investors apprehensive about the sector's near-term prospects, energy equities have bounced back in a big way. That is good news for the broader market as well. The energy sector accounts for nearly <a href="https://www.spdrs.com/product/fund.seam?ticker=SPY">11.4 percent of the S&amp;P 500's weight</a>, indicating it would be hard for the broader market to rally without some help from oil and gas stocks.

Notoriously volatile, energy stocks and ETFs have put that volatility on full display in the past month, treating investors to an almost dizzying rally. In that time, the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) has jumped 8.2 percent, more than doubling the returns of the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>).

Investors appear to be betting on more upside. Last week, the top ETF as ranked by inflows was XLE with $391 million, according to a Deutsche Bank note. The SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>) was also found among the top 20 with inflows of $110 million. Energy investors might just be able to find additional upside with the following ETFs.

PowerShares Dynamic Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>)
In comparison to funds like XLE and XOP, the PowerShares Dynamic Energy Exploration &amp; Production Portfolio leads a somewhat anonymous existence. Arguably, that should not be the case, as in the past month PXE has outperformed XLE, XOP and the Vanguard Energy ETF (NYSE: <a class="ticker" href="/stock/vde#NYSE">VDE</a>) by decent margins.

There is a secret that explains PXE's recent bullishness. That is <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2829120/3-etfs-for-resurgent-refiners">exposure to refiners</a>. Those stocks have been on fire recently and with PXE being home to at least five stocks with downstream exposure, the fund has benefited.

iShares S&amp;P Global Energy Index Fund (NYSE: <a class="ticker" href="/stock/ixc#NYSE">IXC</a>)
The iShares S&amp;P Global Energy Index Fund does allocate almost half its weight to U.S. companies and Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) do combine for 23.5 percent of the fund's weight, but IXC does have enough non-U.S. exposure to be considered a legitimate international ETF. Problem is global energy stocks have been lagging their U.S. counterparts. In the past month, IXC is up 7.3 percent, which is pretty good, but that run also puts IXC behind XLE.

In IXC's favor is an improving chart that indicates the ETF should find support just under $38 in the event of a pullback and that the fund could run back to the $41 area without much material resistance. IXC also yields more than SPY.

Market Vectors Unconventional Oil &amp; Gas ETF (NYSE: <a class="ticker" href="/stock/frak#NYSE">FRAK</a>)
FRAK came to market in February. In that time, the ETF has been decent at attracting assets, though it still has not risen to the <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2828166/amid-closures-some-new-etfs-are-thriving">upper echelon of new ETFs</a> in terms of size. That may start to change as FRAK's performance improves and it has been doing just that. FRAK is down almost 10 percent since its debut, but has surged 9.2 percent in the past month. A move above $23.25 could confirm a breakout for FRAK.

Market Vectors RVE Hard Assets Producers ETF (NYSE: <a class="ticker" href="/stock/hap#NYSE">HAP</a>)
The Market Vectors RVE Hard Assets Producers ETF is another example of an anonymous energy ETF, but that is not a commentary on the fund's ability to generate returns. A 5.4 percent gain in the past month attests to that fact and $138.3 million in AUM indicates at least a few investors are aware of this ETF. 

There are a couple of rubs with HAP that may limit the fund's upside relative to the other ETFs on this list. First, non-U.S. stocks account for almost 57 percent of HAP's weight. Second, energy names are just 40.6 percent of the fund's overall weight. In an ETF with over 350 stocks, that makes a difference. 

Yes, HAP gives investors exposure to companies such as Exxon Mobil and BP (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>), but names like Potash (NYSE: <a class="ticker" href="/stock/pot#NYSE">POT</a>) and Deere (NYSE: <a class="ticker" href="/stock/de#NYSE">DE</a>) are also prominent within this ETF.

For more on energy ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2681257/bet-on-an-energy-sector-rebound-with-these-etfs-fill-ieo-pxe">here</a>.

Market Vectors RVE Hard Assets Producers ETF

iShares Trust S&P Global Energy Sector Index Fund

These Energy ETFs Have More Gas in The Tank

Monday's news that Tesoro (NYSE: <a class="ticker" href="/stock/tso#NYSE">TSO</a>) will pay about $2.5 billion for BP's (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>) Carson, California refinery and related assets is just the latest sign refiners are back. On an anecdotal basis, the Tesoro/BP deal highlights the vibrancy of the downstream business as Tesoro is expanding its footprint in the California market.

Refining oil into gasoline is notoriously costly in California <a href="http://www.benzinga.com/news/12/08/2828018/tesoro-surges-on-purchase-of-bp-refinery">due to the state's rigid environmental requirements</a> that are rarely found in other states. Still, Tesoro opted to expand its presence in the Golden State and even as oil prices remain elevated by historical standards, shares of refiners have surged in recent months.

"Roaring back" and "resurgent" are descriptors that may not do the refining sector justice. In the past three months, Valero (NYSE: <a class="ticker" href="/stock/vlo#NYSE">VLO</a>) is the "laggard" a trio including HollyFrontier (NYSE: <a class="ticker" href="/stock/hfc#NYSE">HFC</a>). Over that time, Valero is almost 27 percent while HollyFrontier is up nearly 33 percent. Tesoro easily trumps both with a surge of 73.1 percent. 

Do not forget about Phillips 66 (NYSE: <a class="ticker" href="/stock/psx#NYSE">PSX</a>). Separated from ConocoPhillips (NYSE: <a class="ticker" href="/stock/cop#NYSE">COP</a>) earlier this year, Phillips 66 has gained almost 23 percent since that separation, <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2793246/these-spin-offs-are-surging-beam-psx">becoming one of the year's best spin-offs in the process</a>.

Investors obviously have multiple options when it comes to refining stocks and for those looking to capture upside in several refiners at once, there are some ETFs to help.

IndexIQ Global Oil Small Cap ETF (NYSE: <a class="ticker" href="/stock/ioil#NYSE">IOIL</a>)
The IndexIQ Global Oil Small Cap ETF has a deceiving name because the fund is not excessively weighted to speculative small-cap fare. However, IOIL does devote 36 percent of its weight it refining and marketing firms. That exposure to refiners is far in excess of what investors will find with most other energy ETFs. 

Tesoro and Sunoco (NYSE: <a class="ticker" href="/stock/sun#NYSE">SUN</a>) combine for over 16 percent of IOIL's weight. The two are the ETF's third- and fourth-largest holdings, respectively.

PowerShares Energy Exploration &amp; Production Portfolio (NYSE: <a class="ticker" href="/stock/pxe#NYSE">PXE</a>)
The PowerShares Energy Exploration &amp; Production Portfolio is another example of an ETF with a name that does not imply how levered the fund actually is to the refiners' trade. PXE's roster of 29 stocks includes five pure play refiners and a couple of other stocks with downstream exposure.

Marathon Petroleum (NYSE: <a class="ticker" href="/stock/mpc#NYSE">MPC</a>), another refining spin-off is PXE's top holding at six percent while Valero, Tesoro and HollyFrontier combine for over 12 percent of the fund's weight. PXE has jumped 10.3 percent in the past month. A move to the $28 area would take the ETF to its highest levels since April.

Rydex S&amp;P Equal Weight Energy ETF (NYSE: <a class="ticker" href="/stock/rye#NYSE">RYE</a>)
No single stock occupies a large percentage of RYE's weight and that is to be expected with an equal weight product. What is surprising is that RYE's top three holdings are refiners – Tesoro, Valero and Marathon Petroleum. Sunoco is found further down RYE's lineup and the ETF's roster includes enough exposure to integrated oil names to make this fund a legitimate play on the refining renaissance. Despite thin volume, RYE has gained 9.4 percent in the past month.

For more on energy ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/07/2766961/etfs-for-a-chinese-energy-acquisition-spree">here</a>.

Rydex ETF Trust Rydex S&P Equal Weight Energy ETF

The Only Monthly Membership With a Positive ROI!

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The Only Monthly Membership With a Positive ROI!

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