For investors looking for momentum, Invesco DB Energy Fund DBE is probably a suitable pick. The fund just hit a 52-week high and is up 92.5% from its 52-week low price of $8.62/share.
Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
DBE in Focus
The fund seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Energy Index Excess Return (DBIQ Opt Yield Energy Index ER or Index) plus the interest income from the fund's holdings of primarily US Treasury securities and money market income less the fund's expenses. It has AUM of $105 million and charges 78 basis points in annual fees.
Why the Move?
The coronavirus vaccine rollout is gradually helping control the spread of the outbreak across the globe. Accordingly, the global demand and economic growth levels are on the path of recovery from the pandemic-led slump. The optimism surrounding the gradual reopening of global economies and increasing demand is painting a rosy picture for cyclical sectors. Consequently, the energy sector has been gaining investors’ attention on the latest rally in oil prices. Notably, shrinking crude inventories, supply disruption in the Gulf of Mexico following a couple of hurricanes and surging fuel demand are pushing oil prices higher. This is making funds like DBE an attractive investment option.
More Gains Ahead?
It seems like the fund will remain strong, with a positive weighted alpha of 75.92, which gives cues of further rally.
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Invesco DB Energy ETF (NYSE:XLE) (DBE): ETF Research Reports
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