ETF Education Report: ISHARES U.S. OIL EQUIPMENT & SERVICES ETF (IEZ)

What this ETF is trying to do

The ISHARES U.S. OIL EQUIPMENT & SERVICES ETF (ticker: IEZ) is an exchange-traded fund that focuses on companies involved in oil equipment and services. Instead of owning just one company, this ETF holds many different companies at once. Based on the top holdings provided, it includes companies like SLB LTD and BAKER HUGHES CO CLASS A. Because this list is partial, it only shows some of the 35 total holdings in the fund.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only how much the share price changed.

• Total Return: This includes both the change in share price AND any cash distributions (dividends) paid out to investors.

For IEZ, the numbers show growth over different time periods:

• Year-to-Date (YTD): The price return is approximately 31.24%, while the total return is approximately 32.37%.

• One Year: The price return was approximately 40.75%, and the total return was approximately 42.54%.

• Three Years: The price return was approximately 20.93%, and the total return was approximately 26.90%.

To give you an idea of price movement, the current price is $27.39. The estimated price from roughly one year ago was approximately $19.46.

Income and distribution explanation

Some investors look for "income," which is cash paid out by the ETF. IEZ has a distribution yield of approximately 1.20%. This means the cash distributions are about 1.20% of the current share price. The fund usually pays these out quarterly, and it has made 4 payments over the last 12 months. It is important to remember that a distribution yield is not the same as total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly. StockValueFinder uses an "erosion-risk score" to help track this. For IEZ, the erosion score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown positive price returns and total returns over the one-year and three-year periods.

• The data shows no detected price erosion.

Cons

• The distribution yield (1.20%) is relatively low compared to some other types of income-focused investments.

• The fund's performance is tied to the oil equipment and services sector.

Beginner takeaway

IEZ tracks companies in the oil services industry. When looking at this ETF, you can see that the total return is higher than the price return, which means the cash distributions added extra value to the share price changes. Always remember that past performance does not guarantee what will happen in the future.