Designed to provide broad exposure to the Energy - Equipment and services segment of the equity market, the SPDR S&P Oil & Gas Equipment & Services ETF (
XES Quick Quote XES - Free Report) is a passively managed exchange traded fund launched on 06/19/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options 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 10, placing it in bottom 38%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $489.89 million, making it one of the larger ETFs attempting to match the performance of the Energy - Equipment and services segment of the equity market. XES 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.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 5.43%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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, Dril-Quip Inc. (DRQ) accounts for about 8.96% of total assets, followed by Baker Hughes Company Class A (
BKR Quick Quote BKR - Free Report) and National Oilwell Varco Inc. (NOV).
The top 10 holdings account for about 56.41% of total assets under management.
Performance and Risk
So far this year, XES has lost about -71.63%, and is down about -79.30% in the last one year (as of 04/01/2020). During this past 52-week period, the fund has traded between $20 and $125.50.
The ETF has a beta of 2.41 and standard deviation of 46.26% for the trailing three-year period, making it a high risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers.
SPDR S&P Oil & Gas Equipment & Services ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XES, then, is not the best option for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares U.S. Oil Equipment & Services ETF (
IEZ Quick Quote IEZ - Free Report) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Vectors Oil Services ETF ( OIH Quick Quote OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $25.84 million in assets, VanEck Vectors Oil Services ETF has $283.25 million. IEZ has an expense ratio of 0.42% and OIH charges 0.35%. Bottom Line
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Zacks ETF Center.