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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
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The SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) was launched on 06/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $304.40 million, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, XES seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
The S&P Oil & Gas Equipment & Services Select Industry Index represents the oil and gas equipment and services sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX,NASDAQ National Market and NASDAQ Small Cap exchanges. The Oil & Gas Equipment Index is a modified equal weight index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XES, making it one of the least expensive products in the space.
XES's 12-month trailing dividend yield is 0.36%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Technipfmc Plc (FTI - Free Report) accounts for about 5.71% of the fund's total assets, followed by U.s. Silica Holdings Inc. (SLCA - Free Report) and Championx Corporation (CHX - Free Report) .
XES's top 10 holdings account for about 48.05% of its total assets under management.
Performance and Risk
The ETF return is roughly 49.36% and was up about 56.60% so far this year and in the past one year (as of 12/26/2022), respectively. XES has traded between $49.40 and $82.74 during this last 52-week period.
The fund has a beta of 2.08 and standard deviation of 61.92% for the trailing three-year period, which makes XES a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services 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.
IShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Oil Services ETF (OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $338.26 million in assets, VanEck Oil Services ETF has $2.55 billion. IEZ has an expense ratio of 0.39% and OIH charges 0.35%.
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.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
The SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) was launched on 06/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $304.40 million, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, XES seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
The S&P Oil & Gas Equipment & Services Select Industry Index represents the oil and gas equipment and services sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX,NASDAQ National Market and NASDAQ Small Cap exchanges. The Oil & Gas Equipment Index is a modified equal weight index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XES, making it one of the least expensive products in the space.
XES's 12-month trailing dividend yield is 0.36%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Technipfmc Plc (FTI - Free Report) accounts for about 5.71% of the fund's total assets, followed by U.s. Silica Holdings Inc. (SLCA - Free Report) and Championx Corporation (CHX - Free Report) .
XES's top 10 holdings account for about 48.05% of its total assets under management.
Performance and Risk
The ETF return is roughly 49.36% and was up about 56.60% so far this year and in the past one year (as of 12/26/2022), respectively. XES has traded between $49.40 and $82.74 during this last 52-week period.
The fund has a beta of 2.08 and standard deviation of 61.92% for the trailing three-year period, which makes XES a high risk choice in this particular space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services 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.
IShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Oil Services ETF (OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $338.26 million in assets, VanEck Oil Services ETF has $2.55 billion. IEZ has an expense ratio of 0.39% and OIH charges 0.35%.
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.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.