S&P Capital IQ is less enthusiastic about the Guggenheim S&P Equal Weight Energy ETF (NYSEArca: RYE) in part because RYE’s weight to exploration and production names is 40% or about double the weight XLE assigns to those firms.
Exploration and production stocks are usually more sensitive to oil price fluctuations than their integrated counterparts, like Exxon and Chevron. That much was on display last year when the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) lost 29.4% as USO plunged more than 42%.
“In addition to the different exposures, RYE ranks lower than XLE according to S&P Capital IQ ETF Research due to its higher net expense ratio (0.40% vs. 0.16%) and wider bid/ask spread ($0.10 vs. $0.01),” said S&P Capital IQ.
The research firm weights RYE underweight. [Energy the Equal-Weight Way]
Energy Select Sector SPDR
