The iShares U.S. Oil Equipment Services ETF (IEZ) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Equipment and services segment of the equity market.
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.
Sector ETFs are also funds of convenience, offering many 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 2, placing it in top 13%.
The fund is sponsored by Blackrock. It has amassed assets over $216.69 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.
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 0.42%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 5.06%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Schlumberger Nv (SLB) accounts for about 21.31% of total assets, followed by Baker Hughes Class A (BKR) and Halliburton (HAL).
The top 10 holdings account for about 71.80% of total assets under management.
Performance and Risk
The ETF has lost about -62.74% and is down about -66.99% so far this year and in the past one year (as of 06/04/2020), respectively. IEZ has traded between $5.21 and $21.90 during this last 52-week period.
The ETF has a beta of 2.34 and standard deviation of 46.54% for the trailing three-year period, making it a high risk choice in the space. With about 34 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 SP Oil Gas Equipment Services ETF (XES) tracks S&P Oil & Gas Equipment & Services Select Industry Index and the VanEck Vectors Oil Services ETF (OIH) tracks MVIS U.S. Listed Oil Services 25 Index. SPDR SP Oil Gas Equipment Services ETF has $99.96 million in assets, VanEck Vectors Oil Services ETF has $517.76 million. XES has an expense ratio of 0.35% and OIH charges 0.35%.
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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iShares U.S. Oil Equipment Services ETF (IEZ): ETF Research Reports
Schlumberger Limited (SLB) : Free Stock Analysis Report
Halliburton Company (HAL) : Free Stock Analysis Report
Baker Hughes Company (BKR) : Free Stock Analysis Report
SPDR SP Oil Gas Equipment Services ETF (XES): ETF Research Reports
VanEck Vectors Oil Services ETF (OIH): ETF Research Reports
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