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

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $571.94 million, making it one of the larger ETFs attempting to match the performance of the Energy - Exploration segment of the equity market. IEO seeks to match the performance of the Dow Jones U.S. Select Oil Exploration & Production Index before fees and expenses.

The Dow Jones U.S. Select Oil Exploration & Production Index is a free-float adjusted market capitalization-weighted index. The Index includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.38%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.85%.

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, Conocophillips (COP) accounts for about 17.46% of total assets, followed by Valero Energy Corp (VLO) and Marathon Petroleum Corp (MPC).

The top 10 holdings account for about 71.4% of total assets under management.

Performance and Risk

So far this year, IEO has added roughly 42.44%, and is up roughly 42.22% in the last one year (as of 08/03/2026). During this past 52-week period, the fund has traded between $86.38 and $128.99.

The ETF has a beta of 0.39 and standard deviation of 25.31% for the trailing three-year period, making it a high risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.

Alternatives

iShares U.S. Oil & Gas Exploration & Production 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, IEO is a good 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.

Portfolio Building Block Integrated Oil & Gas and Exp and Prod Index ETF (PBOG) tracks BITA GLOBAL OIL & GAS SELECT INDEX and the State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) tracks S&P Oil & Gas Exploration & Production Select Industry Index. Portfolio Building Block Integrated Oil & Gas and Exp and Prod Index ETF has $451.84 million in assets, State Street SPDR S&P Oil & Gas Exploration & Production ETF has $3.61 billion. PBOG has an expense ratio of 0.13%, and XOP charges 0.35%.

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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This article originally published on Zacks Investment Research (zacks.com).

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