Designed to provide broad exposure to the Energy ETFs category of the market, the State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES) is a smart beta exchange traded fund launched on 06/19/2006.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $415.2 million, this makes it one of the average sized ETFs in the Energy ETFs. XES is managed by State Street Investment Management. This particular fund, before fees and expenses, seeks to match the performance of the S&P Oil & Gas Equipment & Services Select Industry Index.
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%.
The fund has a 12-month trailing dividend yield of 1.23%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 100% of the portfolio.
Looking at individual holdings, Tidewater Inc (TDW) accounts for about 4.46% of total assets, followed by Seadrill Limited (SDRL) and Technipfmc Plc (FTI).
Its top 10 holdings account for approximately 42.76% of XES's total assets under management.
Performance and Risk
The ETF has gained about 29.69% and is up about 60.76% so far this year and in the past one year (as of 07/07/2026), respectively. XES has traded between $63.43 and $133.60 during this last 52-week period.
The fund has a beta of 0.92 and standard deviation of 32.69% for the trailing three-year period, which makes XES a high risk choice in this particular space. With about 35 holdings, it has more concentrated exposure than peers .
Alternatives
State Street SPDR S&P Oil & Gas Equipment & Services ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $359.55 million in assets, VanEck Oil Services ETF has $1.93 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
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State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).