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

Launched on May 1, 2006, the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Exploration segment of the equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Energy - Exploration is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $633.28 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 1.95%.

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.

This ETF has heaviest allocation in the Energy sector -- about 100% of the portfolio.

Looking at individual holdings, Conocophillips (COP) accounts for about 19.11% of total assets, followed by Eog Resources Inc (EOG) and Phillips (PSX).

The top 10 holdings account for about 70.78% of total assets under management.

Performance and Risk

Year-to-date, the iShares U.S. Oil & Gas Exploration & Production ETF has added about 35.83% so far, and was up about 29.27% over the last 12 months (as of 04/02/2026). IEO has traded between $74.87 and $128.99 in this past 52-week period.

The ETF has a beta of 0.47 and standard deviation of 24.98% for the trailing three-year period, making it a high risk choice in the space. With about 49 holdings, it has more concentrated exposure than peers.

Alternatives

iShares U.S. Oil & Gas Exploration & Production ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IEO, then, is not a great choice for investors seeking exposure to the Energy ETFs segment of the market. Instead, there are better ETFs in the space to consider.

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 $664.26 million in assets, State Street SPDR S&P Oil & Gas Exploration & Production ETF has $3.39 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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iShares U.S. Oil & Gas Exploration & Production ETF (IEO): ETF Research Reports

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

Zacks Investment Research