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Should You Invest in the iShares U.S. Energy ETF (IYE)?
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Designed to provide broad exposure to the Energy - Broad segment of the equity market, the iShares U.S. Energy ETF (IYE - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
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 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.32 billion, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. IYE seeks to match the performance of the Dow Jones U.S. Oil & Gas Index before fees and expenses.
The Russell 1000 Energy RIC 22.5/45 Capped Gross Index measures the performance of the energy sector of the U.S. equity market.
Costs
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 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.42%.
Sector Exposure and Top Holdings
While 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 96.80% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 23.28% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 69.70% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Energy ETF has lost about -2.71% so far, and is up roughly 19.53% over the last 12 months (as of 07/24/2023). IYE has traded between $37.48 and $50.50 in this past 52-week period.
The ETF has a beta of 1.37 and standard deviation of 32.87% for the trailing three-year period, making it a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy 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, IYE is a reasonable 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.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.63 billion in assets, Energy Select Sector SPDR ETF has $35.20 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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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Should You Invest in the iShares U.S. Energy ETF (IYE)?
Designed to provide broad exposure to the Energy - Broad segment of the equity market, the iShares U.S. Energy ETF (IYE - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
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 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.32 billion, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. IYE seeks to match the performance of the Dow Jones U.S. Oil & Gas Index before fees and expenses.
The Russell 1000 Energy RIC 22.5/45 Capped Gross Index measures the performance of the energy sector of the U.S. equity market.
Costs
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 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.42%.
Sector Exposure and Top Holdings
While 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 96.80% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 23.28% of total assets, followed by Chevron Corp (CVX - Free Report) and Conocophillips (COP - Free Report) .
The top 10 holdings account for about 69.70% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Energy ETF has lost about -2.71% so far, and is up roughly 19.53% over the last 12 months (as of 07/24/2023). IYE has traded between $37.48 and $50.50 in this past 52-week period.
The ETF has a beta of 1.37 and standard deviation of 32.87% for the trailing three-year period, making it a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy 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, IYE is a reasonable 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.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.63 billion in assets, Energy Select Sector SPDR ETF has $35.20 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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.