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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
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Launched on 06/19/2006, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) is a smart beta exchange traded fund offering broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $368.59 million, this makes it one of the average sized ETFs in the Energy ETFs. XES is managed by State Street Global Advisors. Before fees and expenses, XES seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
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 & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.33%.
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.
XES's heaviest allocation is in the Energy sector, which is about 98.90% of the portfolio.
When you look at individual holdings, Patterson-Uti Energy Inc. (PTEN - Free Report) accounts for about 5.69% of the fund's total assets, followed by Helmerich & Payne Inc. (HP - Free Report) and Halliburton Company (HAL - Free Report) .
XES's top 10 holdings account for about 48.42% of its total assets under management.
Performance and Risk
So far this year, XES return is roughly 44.43%, and it's up approximately 57.21% in the last one year (as of 04/22/2022). During this past 52-week period, the fund has traded between $45.70 and $82.43.
XES has a beta of 2.26 and standard deviation of 60.37% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Oil Services ETF (OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $365.77 million in assets, VanEck Oil Services ETF has $4.12 billion. IEZ has an expense ratio of 0.41% and OIH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
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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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
Launched on 06/19/2006, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) is a smart beta exchange traded fund offering broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $368.59 million, this makes it one of the average sized ETFs in the Energy ETFs. XES is managed by State Street Global Advisors. Before fees and expenses, XES seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
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 & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.33%.
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.
XES's heaviest allocation is in the Energy sector, which is about 98.90% of the portfolio.
When you look at individual holdings, Patterson-Uti Energy Inc. (PTEN - Free Report) accounts for about 5.69% of the fund's total assets, followed by Helmerich & Payne Inc. (HP - Free Report) and Halliburton Company (HAL - Free Report) .
XES's top 10 holdings account for about 48.42% of its total assets under management.
Performance and Risk
So far this year, XES return is roughly 44.43%, and it's up approximately 57.21% in the last one year (as of 04/22/2022). During this past 52-week period, the fund has traded between $45.70 and $82.43.
XES has a beta of 2.26 and standard deviation of 60.37% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Oil Services ETF (OIH - Free Report) tracks MVIS U.S. Listed Oil Services 25 Index. IShares U.S. Oil Equipment & Services ETF has $365.77 million in assets, VanEck Oil Services ETF has $4.12 billion. IEZ has an expense ratio of 0.41% and OIH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
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.