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IYE tracks the Dow Jones U.S. Oil & Gas Index and holds 68 stocks. Like other traditional cap-weighted energy ETFs, IYE devotes a significant portion of its lineup to Dow components Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), the two largest U.S. oil companies. Those stocks combine for almost 39% of the ETF’s weight.

“The sector also appears unusually cheap on an absolute basis. At less than 1.7x earnings, the current valuation is the cheapest since early 2016 and is in the bottom 5% of all observations going back to 1995,” said BlackRock.

For more information on the oil market, visit our energy category.