Looking for broad exposure to the Energy - Equipment and services segment of the equity market? You should consider the iShares U.S. Oil Equipment & Services ETF (
IEZ Quick Quote IEZ - Free Report) , a passively managed exchange traded fund launched on 05/01/2006.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Equipment and services is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
The fund is sponsored by Blackrock. It has amassed assets over $351.14 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Equipment and services segment of the equity market. IEZ seeks to match the performance of the Dow Jones U.S. Select Oil Equipment & Services Index before fees and expenses.
The Dow Jones US Select Oil Equip & Serv Ind is a free-float adjusted market capitalization-wghtd index. It measures the performance of oil equipment & services sector of US equity market by including companies that are suppliers of equipment or services to oil fields & offshore platforms, such as drilling, exploration, engineering, logistics, seismic information services & platform construction.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 0.56%.
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.
Looking at individual holdings, Schlumberger Nv (
SLB Quick Quote SLB - Free Report) accounts for about 23.79% of total assets, followed by Baker Hughes Class A ( BKR Quick Quote BKR - Free Report) and Helmerich & Payne Inc ( HP Quick Quote HP - Free Report) .
The top 10 holdings account for about 78.90% of total assets under management.
Performance and Risk
The ETF has added about 32.21% and it's up approximately 41.97% so far this year and in the past one year (as of 05/03/2022), respectively. IEZ has traded between $11.77 and $20.95 during this last 52-week period.
The ETF has a beta of 2.08 and standard deviation of 56.89% for the trailing three-year period, making it a high risk choice in the space. With about 28 holdings, it has more concentrated exposure than peers.
IShares U.S. Oil Equipment & Services 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, IEZ 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.
SPDR S&P Oil & Gas Equipment & Services ETF (
XES Quick Quote XES - Free Report) tracks S&P Oil & Gas Equipment & Services Select Industry Index and the VanEck Oil Services ETF ( OIH Quick Quote OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. SPDR S&P Oil & Gas Equipment & Services ETF has $323.35 million in assets, VanEck Oil Services ETF has $3.72 billion. XES has an expense ratio of 0.35% and OIH charges 0.35%. Bottom Line
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Zacks ETF Center.