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Making its debut on 01/05/2007, smart beta exchange traded fund Invesco DB Oil Fund (DBO - Free Report) provides investors broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $387.19 M, making it one of the larger ETFs in the Energy ETFs. This particular fund seeks to match the performance of the DBIQ Optimum Yield Crude Oil Index Excess Return before fees and expenses.
The DBIQ Optimum Yield Crude Oil Index Excess Return Index is a rules-based index composed of futures contracts on Light Sweet Crude Oil (WTI) and is intended to reflect the performance of crude oil.
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.
Annual operating expenses for this ETF are 0.78%, making it one of the more expensive products in the space.
DBO's 12-month trailing dividend yield is 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
The top 10 holdings account for about 99.97% of total assets under management.
Performance and Risk
The fund's year-to-date return has added about 23.05%, and is up roughly 51.76% in the last one year (as of 08/28/2018). DBO has traded between $8.03 and $12.64 in the past 52-week period.
The ETF has a beta of 0.77 and standard deviation of 30.34% for the trailing three-year period, making it a high choice in the space. With about 1 holdings, it has more concentrated exposure than peers.
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 Invesco DB Oil Fund (DBO) a Hot ETF Right Now?
Making its debut on 01/05/2007, smart beta exchange traded fund Invesco DB Oil Fund (DBO - Free Report) provides investors broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $387.19 M, making it one of the larger ETFs in the Energy ETFs. This particular fund seeks to match the performance of the DBIQ Optimum Yield Crude Oil Index Excess Return before fees and expenses.
The DBIQ Optimum Yield Crude Oil Index Excess Return Index is a rules-based index composed of futures contracts on Light Sweet Crude Oil (WTI) and is intended to reflect the performance of crude oil.
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.
Annual operating expenses for this ETF are 0.78%, making it one of the more expensive products in the space.
DBO's 12-month trailing dividend yield is 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
The top 10 holdings account for about 99.97% of total assets under management.
Performance and Risk
The fund's year-to-date return has added about 23.05%, and is up roughly 51.76% in the last one year (as of 08/28/2018). DBO has traded between $8.03 and $12.64 in the past 52-week period.
The ETF has a beta of 0.77 and standard deviation of 30.34% for the trailing three-year period, making it a high choice in the space. With about 1 holdings, it has more concentrated exposure than peers.
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.