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Should You Invest in the Strive U.S. Energy ETF (DRLL)?

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Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Strive U.S. Energy ETF (DRLL - Free Report) , a passively managed exchange traded fund launched on 08/09/2022.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 Strive Etfs. It has amassed assets over $323.88 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. DRLL seeks to match the performance of the BLOOMBERG US ENERGY SELECT INDEX before fees and expenses.

The Bloomberg US Energy Select Index measures the performance of US oil and gas producers.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.41%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.85%.

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 99% of the portfolio.

Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 23.88% of total assets, followed by Chevron Corp (CVX - Free Report) and Eog Resources Inc (EOG - Free Report) .

The top 10 holdings account for about 77.94% of total assets under management.

Performance and Risk

Year-to-date, the Strive U.S. Energy ETF has added roughly 6.20% so far, and was up about 1.50% over the last 12 months (as of 09/02/2024). DRLL has traded between $26.76 and $32.49 in this past 52-week period.

The ETF has a beta of 0.80 and standard deviation of 22.50% for the trailing three-year period. With about 41 holdings, it has more concentrated exposure than peers.

Alternatives

Strive U.S. Energy ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DRLL is an excellent 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 $8.43 billion in assets, Energy Select Sector SPDR ETF has $37.40 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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