Should You Invest in the iShares U.S. Oil & Gas Exploration & Production ETF (IEO)?

Core Viewpoint - The iShares U.S. Oil & Gas Exploration & Production ETF (IEO) is a passively managed fund aimed at providing broad exposure to the Energy - Exploration segment of the equity market, appealing to both retail and institutional investors due to its low costs and transparency [1][2]. Fund Overview - Launched on May 1, 2006, IEO has accumulated over $491.71 million in assets, making it one of the larger ETFs in the Energy - Exploration segment [3]. - The fund seeks to match the performance of the Dow Jones U.S. Select Oil Exploration & Production Index, which includes companies involved in oil and gas exploration, extraction, production, refining, and supply [4]. Cost Structure - IEO has an annual operating expense ratio of 0.40%, positioning it as one of the cheaper options in the ETF space, with a 12-month trailing dividend yield of 2.56% [5]. Sector Exposure and Holdings - The ETF has a heavy allocation in the Energy sector, comprising approximately 99.60% of its portfolio, with Conocophillips (COP) making up about 18.61% of total assets, followed by Eog Resources Inc (EOG) and Marathon Petroleum Corp (MPC) [6]. - The top 10 holdings account for about 71.77% of total assets under management [7]. Performance Metrics - As of July 24, 2025, IEO has a return of roughly 1.86% and is down about -5.05% year-to-date, with trading between $74.87 and $101.83 over the past 52 weeks [8]. - The ETF has a beta of 0.82 and a standard deviation of 28.29% for the trailing three-year period, indicating a higher risk profile [8]. Alternatives - IEO has a Zacks ETF Rank of 4 (Sell), suggesting it may not be the best option for investors seeking exposure to the Energy ETFs segment, with better alternatives available [9][10]. - Alternatives include the Invesco Energy Exploration & Production ETF (PXE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), with PXE having $70.24 million in assets and XOP at $1.81 billion [11].