PDC Energy was one of the small-cap wonders this year, up over 120% in 2021 and translating into profits for the for Invesco S&P SmallCap Energy ETF (PSCE).
With an allocation of around 9%, the share is the fund’s largest holding. As described on its website, PDC Energy is “an independent oil and gas company focused on maintaining a strong balance sheet and debt metrics while generating value-adding organic growth from a liquid portfolio through horizontal drilling.”
The oil and gas industry has rebounded this year after a bleak 2020 that saw oil prices drop below $ 0. Things have turned in a big way and the energy rally has lasted for much of 2021.
PDC Energy has done so well that the company recently announced the company’s first quarterly cash dividend declaration.
“We are excited to usher in a new era for PDC and its shareholders,” said Bart Brookman, President and CEO. “We welcome the opportunity to return cash to shareholders and believe that our continued focus on deleveraging and share buybacks should enable us to sustainably grow our dividend over time.”
Small cap strength with an energy boost
PDC Energy’s luck is also reflected in profits for PSCE. The fund is up over 80% year over year.
As for the ETF, PSCE aims to track the investment results of the S&P SmallCap 600® Capped Energy Index. The Fund generally invests at least 90% of its total assets in the securities of US small capitalization energy companies that make up the underlying index.
These companies are principally engaged in the production, sale or maintenance of energy-related products, including oil and gas exploration and production, refining, oil services and pipelines. The fund’s expense ratio is 0.29%, which is a relative bargain given the category average of 0.47%.
PSCE also benefits from a focus on renewable energy, which continues to propel the sector forward as the world strives to reduce its overall carbon footprint.
“This ETF tracks an index composed of common stocks of US energy companies that are primarily involved in the production, sale or maintenance of energy-related products, including oil and gas exploration and production, refining, oil services, pipeline and solar , Wind and other non-oil based energies, ”according to an analysis of the ETF database.
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