Compelling valuations and a tempting dividend yield could continue to support IPW in the face of ongoing BP controversy.
On a book value basis, or a company’s value after stripping out its liabilities, the MSCI World Energy Index recently closed at a 15% discount to the MSCI World Index of developed markets. The gap compared with an average premium of 2.3 percent since 2000, reported David Wilson for Bloomberg last month.
BP, Shell and Total, a combined 37% of IPW’s weight, all traded at substantial book value discounts to U.S. rivals Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX). [Bargains With Global Oil ETFs]
IPW’s dividend yield of 3.13% is well above the 1.72% found on the Energy Select Sector SPDR (NYSEArca: XLE).
SPDR S&P International Energy Sector ETF
