Designed to provide broad exposure to the Energy - Equipment and services segment of the equity market, the iShares U.S. Oil Equipment & Services ETF (IEZ) is a passively managed exchange traded fund launched on 05/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $241.74 M, 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.
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 0.43%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.37%.
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.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Schlumberger Nv (SLB) accounts for about 17.16% of total assets, followed by Halliburton (HAL) and National Oilwell Varco Inc (NOV).
The top 10 holdings account for about 60.47% of total assets under management.
Performance and Risk
So far this year, IEZ has lost about -24.02%, and is down about -16.58% in the last one year (as of 11/15/2018). During this past 52-week period, the fund has traded between $26.88 and $40.37.
The ETF has a beta of 1.33 and standard deviation of 30.52% for the trailing three-year period, making it a high risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers.
IShares U.S. Oil Equipment & Services ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IEZ, 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.
SPDR S&P 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 S&P Oil & Gas Equipment & Services ETF has $280.97 M in assets, VanEck Vectors Oil Services ETF has $957.77 M. 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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ISHARS-US OIL E (IEZ): ETF Research Reports
VANECK-OIL SVC (OIH): ETF Research Reports
SPDR-SP O&G EQP (XES): ETF Research Reports
National Oilwell Varco, Inc. (NOV) : Free Stock Analysis Report
Halliburton Company (HAL) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
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