The stocks for oil services have been on a lookout since 2007. The oil services sector did experience a pullout from the market but as the prices of crude oil increased the investment sector found new highs. Oil services ETF options are mostly acquired by short term traders as they can outperform integrated oil stocks when oil prices are rising.
There is a lot to admire when it comes to oil services ETFs. The narrow focus on larger companies is considered an advantage by investors. The oil services ETFs has holdings in some of the largest oil and gas companies in the world. By investing in oil services ETFs the investors can mitigate the risk on to speculative stocks. The oil prices are also circulating around $90 a barrel so the run for the oil services ETF is going to remain intact for quite some time.
There are currently four oil services ETF options to choose from
- Oil Service HOLDRS ETF (OIH): This is the largest oil services ETF with over $3 billion in assets. It has an expense ratio of 0.11% with holdings in 14 oil based companies including Schlumberger, Baker Hughes, Halliburton and Transocean. Currently Schlumberger holds 20% of the entire ETF. This ETF does not track a specific index. It is up 15% year-to-date but its performance has experienced ups and downs but it is a good bet for investors. It trades on average 6.34 million shares a day.
- iShares Dow Jones US Oil Equipment & Services ETF (IEZ): IEZ has almost $400 million in assets with an expense ratio of 0.47%. It is slightly more diversified than OIH as it has around 44 oil service and equipment stocks. IEZ was also the best performing ETF in 2010 in this category reaching up at 29%. It has a slightly high P/E ratio as well at 26.3. Schlumberger also is the highest allocator of assets here with holding 22% of the assets. Other holdings include Halliburton, National Oilwell Varco, Baker Hughes and Weatherford Intl. Although it is widely diversified but it is not considered an investor’s favorite.
- PowerShares Dynamic Oil & Gas Services ETF (PXJ): PXJ has around $175 million in assets with an expense ratio of 0.63%. It is slightly smaller than OIH and IEZ but is an investor’s faovorite. It consists of 30 stocks with highest holdings with McDermott, Baker Hughes, Noble Corp and Halliburton. They account for 15% of the ETF assets. PXJ has a low P/E ratio at 15.5 but it has elevated 27% since its inception in 2007.
- SPDR S&P Oil & Gas Equipment and Services ETF (XES): This oil services ETF has $ 487 million in assets and has an expense ratio of 0.35%. It has holdings in 27 companies with Weatherford having the largest allocation of 4%. Other holdings include Basic Energy Services, Pioneer Drilling, Carbo Ceramics and Cemeron Intl Corp. The P/E ratio is at 17.7 which is considered acceptably well. XES has grown 27% only in 2010 and has performed well since its inception in 2007.