With Oil Prices at All Time Highs, IEZ Spends 6th Week at #3 on ETF Momentum Tracker’s Sector Momentum Table
Williamstown, MA, June 20, 2008 --(PR.com)-- iShares Dow Jones U.S. Oil Equipment & Services (IEZ) has enjoyed a good run at Fidelity Independent Adviser’s ETF Momentum Tracker. On April 1, 2008, IEZ entered the sector momentum table’s top ten, reaching the third spot by May 13th. http://www.fidelityadviser.com/readMe_ETF.asp
With oil prices reaching record highs, it is no surprise that the two funds ahead of IEZ are also in the oil family. IEO has been at the #2 spot since early may, while GSG, holding steady at #1, has held the top spot since April 22, 2008. GSG is also the second largest holding in ETF Momentum Tracker’s Sector Portfolio.
http://store.fidelityindependentadviser.com/etf1yr.html
With this price increase, pressure is mounting for increased production. Fields once deemed too costly to operate are suddenly in demand, as are new technologies to extract oil out of difficult places and materials. The U.S. government is calling on producers around the world to pry their spigots wide -open.
That’s been good news for shares of the upstream energy firms that dominate iShares Oil Equipment. IEZ, is up 44.7% since its May 2006 inception and nearly 58% since March 30, 2007. The fund invests in the stocks of about 50 companies that build and maintain the massive infrastructure that produces and distributes the world’s oil, such as rigs and pipelines.
Many of these firms are huge and diversified with operations that stretch across the energy sector—such as top holding Schlumberger, the shares of which are up 20.5% in the last 90 days. But IEZ tends to avoid companies that are primarily refiners or exploration/production specialists and does include firms that limit themselves almost strictly to the oil patch, such as No. 2 holding TransoOcean, which focuses on the offshore drilling industry.
Most of IEZ’s stocks perform best when oil prices are climbing, and black gold traded as high as $139.89/barrel on Monday—yet another record. IEZ hit an all-time high on June 9 and approached that high again in recent days, leaving it with a year-to-date gain of almost 17% (through June 13), slightly better than the average energy fund.
For months, if not years, analysts and investors have debated how high oil prices—and the stocks tied to them—can go. Many analysts believe the fundamentals of the market don’t warrant the production increases making the news. In this view, soaring prices are being caused by a weak dollar, speculative trading in commodities markets, and the interest-rate policy of the Fed, rather than unmet demand, according to The Wall Street Journal.
If that analysis proves correct, causing pressures for production increases to fade, IEZ is likely to suffer. But with both supply and demand deeply influenced by geopolitics, environmental factors, broader economic conditions and a range of other matters, there’s no way to know for sure how prices will move in the coming months and years.
If oil prices continue to climb, or even hover, firms in the oil industry are likely to devote an increasing amount of their resources to the equipment required to produce the commodity. That scenario would keep IEZ’s recent momentum from flagging.
But it’s worth noting that IEZ is an extremely concentrated fund (recently, 63% of assets in the top -10 holdings) and—like most energy offerings—is extremely volatile, which is perhaps why ETF Momentum Tracker uses GSG for energy exposure in its portfolio. http://store.fidelityindependentadviser.com/etf1yr.html
Performance
Period* Mkt. Return (%) +/-Index**
1 -week -0.71 -0.70
1 -month +1.95 +4.81
3 -months +23.03 +19.12
YTD +16.81 +23.28
1 -year +33.10 +41.55
*Through 06/13/08
**Index: S&P 500
Source: Morningstar
Top 10Ten Holdings*
Schlumberger 15.82%
Transocean 7.70%
Halliburton 7.50%
National Oilwell Varco 6.74%
Weatherford International 5.75%
Baker Hughes 5.14%
Noble 3.81%
Smith International 3.43%
Nabors Industries 2.95%
Cameron International 2.83%
*As of 06/13/08
Source: iShares.com
About Don Dion, Publisher of ETF Momentum Tracker:
Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors Don’s commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers. http://www.fidelityadviser.com/
Mr. Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $850 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management. http://www.dionmm.com/
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With oil prices reaching record highs, it is no surprise that the two funds ahead of IEZ are also in the oil family. IEO has been at the #2 spot since early may, while GSG, holding steady at #1, has held the top spot since April 22, 2008. GSG is also the second largest holding in ETF Momentum Tracker’s Sector Portfolio.
http://store.fidelityindependentadviser.com/etf1yr.html
With this price increase, pressure is mounting for increased production. Fields once deemed too costly to operate are suddenly in demand, as are new technologies to extract oil out of difficult places and materials. The U.S. government is calling on producers around the world to pry their spigots wide -open.
That’s been good news for shares of the upstream energy firms that dominate iShares Oil Equipment. IEZ, is up 44.7% since its May 2006 inception and nearly 58% since March 30, 2007. The fund invests in the stocks of about 50 companies that build and maintain the massive infrastructure that produces and distributes the world’s oil, such as rigs and pipelines.
Many of these firms are huge and diversified with operations that stretch across the energy sector—such as top holding Schlumberger, the shares of which are up 20.5% in the last 90 days. But IEZ tends to avoid companies that are primarily refiners or exploration/production specialists and does include firms that limit themselves almost strictly to the oil patch, such as No. 2 holding TransoOcean, which focuses on the offshore drilling industry.
Most of IEZ’s stocks perform best when oil prices are climbing, and black gold traded as high as $139.89/barrel on Monday—yet another record. IEZ hit an all-time high on June 9 and approached that high again in recent days, leaving it with a year-to-date gain of almost 17% (through June 13), slightly better than the average energy fund.
For months, if not years, analysts and investors have debated how high oil prices—and the stocks tied to them—can go. Many analysts believe the fundamentals of the market don’t warrant the production increases making the news. In this view, soaring prices are being caused by a weak dollar, speculative trading in commodities markets, and the interest-rate policy of the Fed, rather than unmet demand, according to The Wall Street Journal.
If that analysis proves correct, causing pressures for production increases to fade, IEZ is likely to suffer. But with both supply and demand deeply influenced by geopolitics, environmental factors, broader economic conditions and a range of other matters, there’s no way to know for sure how prices will move in the coming months and years.
If oil prices continue to climb, or even hover, firms in the oil industry are likely to devote an increasing amount of their resources to the equipment required to produce the commodity. That scenario would keep IEZ’s recent momentum from flagging.
But it’s worth noting that IEZ is an extremely concentrated fund (recently, 63% of assets in the top -10 holdings) and—like most energy offerings—is extremely volatile, which is perhaps why ETF Momentum Tracker uses GSG for energy exposure in its portfolio. http://store.fidelityindependentadviser.com/etf1yr.html
Performance
Period* Mkt. Return (%) +/-Index**
1 -week -0.71 -0.70
1 -month +1.95 +4.81
3 -months +23.03 +19.12
YTD +16.81 +23.28
1 -year +33.10 +41.55
*Through 06/13/08
**Index: S&P 500
Source: Morningstar
Top 10Ten Holdings*
Schlumberger 15.82%
Transocean 7.70%
Halliburton 7.50%
National Oilwell Varco 6.74%
Weatherford International 5.75%
Baker Hughes 5.14%
Noble 3.81%
Smith International 3.43%
Nabors Industries 2.95%
Cameron International 2.83%
*As of 06/13/08
Source: iShares.com
About Don Dion, Publisher of ETF Momentum Tracker:
Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors Don’s commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers. http://www.fidelityadviser.com/
Mr. Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $850 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management. http://www.dionmm.com/
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Contact
Dion Money Management, LLC
Donald R. Dion
1-800-432-7447 ext. 191
www.dionmm.com
Donald R. Dion
1-800-432-7447 ext. 191
www.dionmm.com
Contact
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