The State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Investment Management. It has amassed assets over $441.99 million, making it one of the larger ETFs in the Energy ETFs. This particular fund seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 1.22%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
When you look at individual holdings, Patterson Uti Energy Inc (PTEN) accounts for about 5.09% of the fund's total assets, followed by Kodiak Gas Services Inc (KGS) and Weatherford International Pl (WFRD).
Its top 10 holdings account for approximately 48.33% of XES's total assets under management.
Performance and Risk
The ETF return is roughly 37.92% and is up about 54.1% so far this year and in the past one year (as of 03/02/2026), respectively. XES has traded between $52.84 and $114.17 during this last 52-week period.
The ETF has a beta of 0.96 and standard deviation of 34.03% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers .
Alternatives
State Street SPDR S&P Oil & Gas Equipment & Services ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
iShares U.S. Oil Equipment & Services ETF (IEZ) tracks Dow Jones U.S. Select Oil Equipment & Services Index and the VanEck Oil Services ETF (OIH) tracks MVIS U.S. Listed Oil Services 25 Index. iShares U.S. Oil Equipment & Services ETF has $349.02 million in assets, VanEck Oil Services ETF has $2.53 billion. IEZ has an expense ratio of 0.38% and OIH changes 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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State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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