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Should You Invest in the iShares U.S. Energy ETF (IYE)?
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If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the iShares U.S. Energy ETF (IYE - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. 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 $3.67 billion, making it one of the largest 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 Russell 1000 Energy RIC 22.5/45 Capped Gross Index measures the performance of the energy sector of the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.70%.
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 97.50% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 21.30% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 70.64% of total assets under management.
Performance and Risk
The ETF has added about 33.35% so far this year and was up about 50.10% in the last one year (as of 05/13/2022). In that past 52-week period, it has traded between $24.81 and $43.81.
The ETF has a beta of 1.41 and standard deviation of 41.32% for the trailing three-year period, making it a high risk choice in the space. With about 41 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 $8.37 billion in assets, Energy Select Sector SPDR ETF has $37.60 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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)?
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the iShares U.S. Energy ETF (IYE - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. 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 $3.67 billion, making it one of the largest 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 Russell 1000 Energy RIC 22.5/45 Capped Gross Index measures the performance of the energy sector of the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.70%.
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 97.50% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 21.30% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 70.64% of total assets under management.
Performance and Risk
The ETF has added about 33.35% so far this year and was up about 50.10% in the last one year (as of 05/13/2022). In that past 52-week period, it has traded between $24.81 and $43.81.
The ETF has a beta of 1.41 and standard deviation of 41.32% for the trailing three-year period, making it a high risk choice in the space. With about 41 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 $8.37 billion in assets, Energy Select Sector SPDR ETF has $37.60 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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.