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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
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The SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by State Street Global Advisors. XES has been able to amass assets over $281.13 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for XES are 0.35%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.46%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For XES, it has heaviest allocation in the Energy sector --about 100% of the portfolio.
Looking at individual holdings, Weatherford International Plc (WFRD - Free Report) accounts for about 4.67% of total assets, followed by Baker Hughes Company Class A (BKR - Free Report) and Cactus Inc. Class A (WHD - Free Report) .
XES's top 10 holdings account for about 45.49% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Oil & Gas Equipment & Services ETF has lost about -0.72% so far, and is up roughly 44.90% over the last 12 months (as of 07/06/2023). XES has traded between $51.42 and $90.89 in this past 52-week period.
The ETF has a beta of 2.03 and standard deviation of 48.71% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is a reasonable option for investors seeking to outperform the Energy ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $183.44 million in assets, VanEck Oil Services ETF has $2.18 billion. IEZ has an expense ratio of 0.39% 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?
The SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by State Street Global Advisors. XES has been able to amass assets over $281.13 million, making it one of the average sized ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for XES are 0.35%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.46%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For XES, it has heaviest allocation in the Energy sector --about 100% of the portfolio.
Looking at individual holdings, Weatherford International Plc (WFRD - Free Report) accounts for about 4.67% of total assets, followed by Baker Hughes Company Class A (BKR - Free Report) and Cactus Inc. Class A (WHD - Free Report) .
XES's top 10 holdings account for about 45.49% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Oil & Gas Equipment & Services ETF has lost about -0.72% so far, and is up roughly 44.90% over the last 12 months (as of 07/06/2023). XES has traded between $51.42 and $90.89 in this past 52-week period.
The ETF has a beta of 2.03 and standard deviation of 48.71% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is a reasonable option for investors seeking to outperform the Energy ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $183.44 million in assets, VanEck Oil Services ETF has $2.18 billion. IEZ has an expense ratio of 0.39% 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.