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Should You Invest in the iShares U.S. Energy ETF (IYE)?
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The iShares U.S. Energy ETF (IYE - Free Report) was launched on 06/12/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.46 billion, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. IYE seeks to match the performance of the Dow Jones U.S. Oil & Gas Index before fees and expenses.
The Dow Jones U.S. Oil & Gas Index measures the performance of the energy sector of the U.S. equity market.
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 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.63%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 98.60% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 23.19% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 72.67% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Energy ETF has gained about 58.05% so far, and it's up approximately 104.03% over the last 12 months (as of 11/04/2021). IYE has traded between $15.53 and $32.06 in this past 52-week period.
The ETF has a beta of 1.69 and standard deviation of 40.48% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYE is a sufficient option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $5.69 billion in assets, Energy Select Sector SPDR ETF has $27.11 billion. VDE has an expense ratio of 0.10% and XLE charges 0.12%.
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. Energy ETF (IYE)?
The iShares U.S. Energy ETF (IYE - Free Report) was launched on 06/12/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.46 billion, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. IYE seeks to match the performance of the Dow Jones U.S. Oil & Gas Index before fees and expenses.
The Dow Jones U.S. Oil & Gas Index measures the performance of the energy sector of the U.S. equity market.
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 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.63%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 98.60% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 23.19% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 72.67% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Energy ETF has gained about 58.05% so far, and it's up approximately 104.03% over the last 12 months (as of 11/04/2021). IYE has traded between $15.53 and $32.06 in this past 52-week period.
The ETF has a beta of 1.69 and standard deviation of 40.48% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYE is a sufficient option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $5.69 billion in assets, Energy Select Sector SPDR ETF has $27.11 billion. VDE has an expense ratio of 0.10% and XLE charges 0.12%.
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.