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Is SPDR S&P Oil & Gas Equipment & Services ETF (XES) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) debuted on 06/19/2006, and offers broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $248.66 million, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, this particular fund 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.35% for XES, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.84%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XES's heaviest allocation is in the Energy sector, which is about 100% of the portfolio.
Looking at individual holdings, Tidewater Inc (TDW - Free Report) accounts for about 4.86% of total assets, followed by Technipfmc Plc (FTI - Free Report) and Cactus Inc A (WHD - Free Report) .
Its top 10 holdings account for approximately 44.14% of XES's total assets under management.
Performance and Risk
The ETF return is roughly 12.84% so far this year and was up about 6.10% in the last one year (as of 07/22/2024). In the past 52-week period, it has traded between $77.41 and $99.83.
The fund has a beta of 1.77 and standard deviation of 40.22% for the trailing three-year period, which makes XES a high risk choice in this particular space. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $171.90 million in assets, VanEck Oil Services ETF has $2.04 billion. IEZ has an expense ratio of 0.40% 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?
A smart beta exchange traded fund, the SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) debuted on 06/19/2006, and offers broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $248.66 million, making it one of the average sized ETFs in the Energy ETFs. Before fees and expenses, this particular fund 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.35% for XES, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.84%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XES's heaviest allocation is in the Energy sector, which is about 100% of the portfolio.
Looking at individual holdings, Tidewater Inc (TDW - Free Report) accounts for about 4.86% of total assets, followed by Technipfmc Plc (FTI - Free Report) and Cactus Inc A (WHD - Free Report) .
Its top 10 holdings account for approximately 44.14% of XES's total assets under management.
Performance and Risk
The ETF return is roughly 12.84% so far this year and was up about 6.10% in the last one year (as of 07/22/2024). In the past 52-week period, it has traded between $77.41 and $99.83.
The fund has a beta of 1.77 and standard deviation of 40.22% for the trailing three-year period, which makes XES a high risk choice in this particular space. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Oil & Gas Equipment & Services ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $171.90 million in assets, VanEck Oil Services ETF has $2.04 billion. IEZ has an expense ratio of 0.40% 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.