To be sure, XOP still faces hurdles as traits of the ETF that were once advantages are currently disadvantages. Namely, XOP has been an attractive option for investors looking to avoid the arguably excessive exposure to Dow components Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), the two largest U.S. oil companies. [An Energy ETF in Rally Mode]
Although the ETF’s 91 holdings have a weighted average market value of nearly $17.5 billion, XOP’s exposure to smaller energy names is hindering the ETF at a time when the iShares Russell 2000 ETF (NYSEArca: IWM) is coming off a third-quarter loss of nearly 9%.
XOP does have the benefit of favorable valuations after the aforementioned tumble. XOP currently sports a P/E ratio of just 15 with a price to book ratio of about 1.6 while the S&P 500 is hovering around a 17.1 P/E and a 2.4 P/B. [Compelling Valuations With Energy ETFs]
SPDR S&P Oil & Gas Exploration & Production ETF
