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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
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Designed to provide broad exposure to the Energy ETFs category of the market, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) is a smart beta exchange traded fund launched on 06/19/2006.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XES has amassed assets over $217.95 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index before fees and expenses.
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
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 cousins, other things remaining the same.
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 1.42%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 100% of the portfolio.
Taking into account individual holdings, Liberty Oilfield Services Inc. Class A (LBRT - Free Report) accounts for about 5.12% of the fund's total assets, followed by Halliburton Company (HAL - Free Report) and Cactus Inc. Class A (WHD - Free Report) .
The top 10 holdings account for about 46.97% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Oil & Gas Equipment & Services ETF has added about 18.87% so far, and is up about 15.35% over the last 12 months (as of 02/18/2022). XES has traded between $45.70 and $67.93 in this past 52-week period.
XES has a beta of 2.29 and standard deviation of 59.76% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $145.38 million in assets, VanEck Oil Services ETF has $2.85 billion. IEZ has an expense ratio of 0.41% 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?
Designed to provide broad exposure to the Energy ETFs category of the market, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) is a smart beta exchange traded fund launched on 06/19/2006.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XES has amassed assets over $217.95 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index before fees and expenses.
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
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 cousins, other things remaining the same.
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 1.42%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 100% of the portfolio.
Taking into account individual holdings, Liberty Oilfield Services Inc. Class A (LBRT - Free Report) accounts for about 5.12% of the fund's total assets, followed by Halliburton Company (HAL - Free Report) and Cactus Inc. Class A (WHD - Free Report) .
The top 10 holdings account for about 46.97% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Oil & Gas Equipment & Services ETF has added about 18.87% so far, and is up about 15.35% over the last 12 months (as of 02/18/2022). XES has traded between $45.70 and $67.93 in this past 52-week period.
XES has a beta of 2.29 and standard deviation of 59.76% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $145.38 million in assets, VanEck Oil Services ETF has $2.85 billion. IEZ has an expense ratio of 0.41% 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.