Should You Invest in the VanEck Oil Services ETF (OIH)?
Sector ETF report for OIH
Looking for broad exposure to the Energy - Equipment and services segment of the equity market? You should consider the VanEck Oil Services ETF (OIH), a passively managed exchange traded fund launched on 12/20/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 - Equipment and services is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
The fund is sponsored by Van Eck. It has amassed assets over $2.82 billion, making it one of the largest ETFs attempting to match the performance of the Energy - Equipment and services segment of the equity market. OIH seeks to match the performance of the MVIS U.S. Listed Oil Services 25 Index before fees and expenses.
The MVIS U.S. Listed Oil Services 25 Index tracks the overall performance of U.S.-listed companies involved in oil services to the upstream oil sector, which include oil equipment, oil services, or oil drilling.
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 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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.
This ETF has heaviest allocation in the Energy sector--about 94.50% of the portfolio.
Looking at individual holdings, Schlumberger Nv (SLB) accounts for about 19.42% of total assets, followed by Halliburton Co (HAL) and Baker Hughes Co (BKR).
The top 10 holdings account for about 72.03% of total assets under management.
Performance and Risk
So far this year, OIH has added about 37.44%, and is up roughly 115.14% in the last one year (as of 11/03/2021). During this past 52-week period, the fund has traded between $100.50 and $244.64.
The ETF has a beta of 2.51 and standard deviation of 57.98% for the trailing three-year period, making it a high risk choice in the space. With about 27 holdings, it has more concentrated exposure than peers.
VanEck Oil Services 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, OIH 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.
IShares U.S. Oil Equipment & Services ETF (IEZ) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the SPDR S&P Oil & Gas Equipment & Services ETF (XES) tracks S&P Oil & Gas Equipment & Services Select Industry Index. IShares U.S. Oil Equipment & Services ETF has $108.93 million in assets, SPDR S&P Oil & Gas Equipment & Services ETF has $167.40 million. IEZ has an expense ratio of 0.41% and XES charges 0.35%.
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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VanEck Oil Services ETF (OIH): ETF Research Reports
Schlumberger Limited (SLB): Free Stock Analysis Report
Halliburton Company (HAL): Free Stock Analysis Report
Baker Hughes Company (BKR): Free Stock Analysis Report
iShares U.S. Oil Equipment & Services ETF (IEZ): ETF Research Reports
SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Reports
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