Should You Invest in the iShares U.S. Oil & Gas Exploration & Production ETF (IEO)?
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Designed to provide broad exposure to the Energy - Exploration segment of the equity market, the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) is a passively managed exchange traded fund launched on 05/01/2006.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.Index DetailsThe fund is sponsored by Blackrock. It has amassed assets over $642.16 million, making it one of the larger ETFs attempting to match the performance of the Energy - Exploration segment of the equity market. IEO seeks to match the performance of the Dow Jones U.S. Select Oil Exploration & Production Index before fees and expenses.The Dow Jones U.S. Select Oil Exploration & Production Index is a free-float adjusted market capitalization-weighted index. The Index includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.It has a 12-month trailing dividend yield of 2.85%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 99.80% of the portfolio.Looking at individual holdings, Conocophillips (COP) accounts for about 18.78% of total assets, followed by Eog Resources Inc (EOG) and Marathon Petroleum Corp (MPC).The top 10 holdings account for about 69.42% of total assets under management.Performance and RiskThe ETF has added roughly 7.23% so far this year and was up about 8.57% in the last one year (as of 11/12/2024). In that past 52-week period, it has traded between $87.76 and $111.94.The ETF has a beta of 1.41 and standard deviation of 30.61% for the trailing three-year period, making it a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.AlternativesIShares U.S. Oil & Gas Exploration & Production 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, IEO is a good 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.Invesco Energy Exploration & Production ETF (PXE) tracks Dynamic Energy Exploration & Production Intellidex Index and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) tracks S&P Oil & Gas Exploration & Production Select Industry Index. Invesco Energy Exploration & Production ETF has $116.31 million in assets, SPDR S&P Oil & Gas Exploration & Production ETF has $2.59 billion. PXE has an expense ratio of 0.60% and XOP charges 0.35%.Bottom LineTo 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 key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 iShares U.S. Oil & Gas Exploration & Production ETF (IEO): ETF Research Reports ConocoPhillips (COP): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis Report Marathon Petroleum Corporation (MPC): Free Stock Analysis Report SPDR S&P Oil & Gas Exploration & Production ETF (XOP): ETF Research Reports Invesco Energy Exploration & Production ETF (PXE): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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