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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.
Investor-friendly, sector ETFs provide many options 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 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.25 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
Investors 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 2.77%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 98% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp- (XOM - Free Report) accounts for about 22.67% of total assets, followed by Chevron Corp- (CVX - Free Report) and Conocophillips- (COP - Free Report) .
The top 10 holdings account for about 69.24% of total assets under management.
Performance and Risk
The ETF has added about 6.59% and was up about 5.29% so far this year and in the past one year (as of 08/05/2024), respectively. IYE has traded between $41.90 and $51.17 during this last 52-week period.
The ETF has a beta of 1.24 and standard deviation of 26.76% for the trailing three-year period, making it a high risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYE is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $8.21 billion in assets, Energy Select Sector SPDR ETF has $37.39 billion. VDE has an expense ratio of 0.10% and XLE charges 0.09%.
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.
Investor-friendly, sector ETFs provide many options 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 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.25 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
Investors 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 2.77%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 98% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp- (XOM - Free Report) accounts for about 22.67% of total assets, followed by Chevron Corp- (CVX - Free Report) and Conocophillips- (COP - Free Report) .
The top 10 holdings account for about 69.24% of total assets under management.
Performance and Risk
The ETF has added about 6.59% and was up about 5.29% so far this year and in the past one year (as of 08/05/2024), respectively. IYE has traded between $41.90 and $51.17 during this last 52-week period.
The ETF has a beta of 1.24 and standard deviation of 26.76% for the trailing three-year period, making it a high risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Energy ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYE is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $8.21 billion in assets, Energy Select Sector SPDR ETF has $37.39 billion. VDE has an expense ratio of 0.10% and XLE charges 0.09%.
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.