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Should You Invest in the iShares U.S. Oil Gas Exploration Production ETF (IEO)?
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Launched on 05/01/2006, the iShares U.S. Oil Gas Exploration Production ETF (IEO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Exploration segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $301.88 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 & Production Index before fees and expenses.
The Dow Jones U.S. Select Oil Exploration & 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.42%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.11%.
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 (COP - Free Report) accounts for about 16.90% of total assets, followed by Eog Resources Inc (EOG - Free Report) and Phillips (PSX - Free Report) .
The top 10 holdings account for about 71.39% of total assets under management.
Performance and Risk
The ETF has lost about -38.38% and is down about -27.65% so far this year and in the past one year (as of 08/19/2020), respectively. IEO has traded between $19.12 and $56.83 during this last 52-week period.
The ETF has a beta of 2.06 and standard deviation of 41.53% for the trailing three-year period, making it a high risk choice in the space. With about 44 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Oil Gas Exploration Production ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IEO, then, is not a suitable option for investors seeking exposure to the Energy ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Invesco Dynamic Energy Exploration Production ETF (PXE - Free Report) tracks Dynamic Energy Exploration & Production Intellidex Index and the SPDR SP Oil Gas Exploration Production ETF (XOP - Free Report) tracks S&P Oil & Gas Exploration & Production Select Industry Index. Invesco Dynamic Energy Exploration Production ETF has $20.21 million in assets, SPDR SP Oil Gas Exploration Production ETF has $2.29 billion. PXE has an expense ratio of 0.63% and XOP charges 0.35%.
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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Should You Invest in the iShares U.S. Oil Gas Exploration Production ETF (IEO)?
Launched on 05/01/2006, the iShares U.S. Oil Gas Exploration Production ETF (IEO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Exploration segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $301.88 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 & Production Index before fees and expenses.
The Dow Jones U.S. Select Oil Exploration & 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.42%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.11%.
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 (COP - Free Report) accounts for about 16.90% of total assets, followed by Eog Resources Inc (EOG - Free Report) and Phillips (PSX - Free Report) .
The top 10 holdings account for about 71.39% of total assets under management.
Performance and Risk
The ETF has lost about -38.38% and is down about -27.65% so far this year and in the past one year (as of 08/19/2020), respectively. IEO has traded between $19.12 and $56.83 during this last 52-week period.
The ETF has a beta of 2.06 and standard deviation of 41.53% for the trailing three-year period, making it a high risk choice in the space. With about 44 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Oil Gas Exploration Production ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IEO, then, is not a suitable option for investors seeking exposure to the Energy ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Invesco Dynamic Energy Exploration Production ETF (PXE - Free Report) tracks Dynamic Energy Exploration & Production Intellidex Index and the SPDR SP Oil Gas Exploration Production ETF (XOP - Free Report) tracks S&P Oil & Gas Exploration & Production Select Industry Index. Invesco Dynamic Energy Exploration Production ETF has $20.21 million in assets, SPDR SP Oil Gas Exploration Production ETF has $2.29 billion. PXE has an expense ratio of 0.63% and XOP charges 0.35%.
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.