The SPDR S&P Oil & Gas Equipment & Services ETF (XES) was launched on 06/19/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Equipment and services segment of the U.S. equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient 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 3, placing it in top 19%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $402.19 M, making it one of the average sized ETFs attempting to match the performance of the Energy - Equipment and services segment of the U.S. 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.59%.
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, Oil States International Inc. (OIS) accounts for about 4.02% of total assets, followed by Fairmount Santrol Holdings Inc. (FMSA) and Transocean Ltd. (RIG).
The top 10 holdings account for about 35.57% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Oil & Gas Equipment & Services ETF has added about 6.63% so far, and it's up approximately 5.76% over the last 12 months (as of 05/16/2018). XES has traded between $12.96 and $19.19 in this past 52-week period.
The ETF has a beta of 1.51 and standard deviation of 39.10% for the trailing three-year period, making it a high risk choice in the space. With about 41 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) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Vectors Oil Services ETF (OIH) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $245.45 M in assets, VanEck Vectors Oil Services ETF has $1.84 B. IEZ has an expense ratio of 0.44% 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ISHARS-US OIL E (IEZ): ETF Research Reports
VANECK-OIL SVC (OIH): ETF Research Reports
SPDR-SP O&G EQP (XES): ETF Research Reports
Fairmount Santrol Holdings Inc. (FMSA) : Free Stock Analysis Report
Oil States International, Inc. (OIS) : Free Stock Analysis Report
Transocean Ltd. (RIG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research