Oil Services ETFs To Watch On Schlumberger Limited. Earnings [Market Vectors Oil Services ETF]

Below, we have highlighted three oil-services ETFs with the highest allocation to SLB that could see some gains in a few upcoming trading sessions and are in focus following Schlumberger’s earnings (read: 3 Top Performing Energy ETFs in Focus Now):

iShares US Oil Equipment & Services ETF (NYSEARCA:IEZ)

This ETF – tracking the Dow Jones U.S. Select Oil Equipment & Services Index – invests about $507.0 million in assets in 51 securities, focusing solely on the energy world. In-focus SLB takes up the first position here with 21.49% of holdings. Generally, when one stock accounts for as much as 21% of an ETF’s weight, its individual performance decides a lot of the fund’s price movement.

The fact proved true in this case also as this ETF gained about 0.43% in Friday trading. The fund also surged a handsome 28% in 2013. IEZ is a cheaper fund, charging 45% of expense ratio.

Market Vectors Oil Services ETF (NYSEARCA:OIH)

OIH tracks the Market Vectors US Listed Oil Services 25 Index. The index invests $1.48 billion of assets in 26 holdings. OIH devotes as much as 20.56% weight to SLB, followed by 10.76% in HAL. OIH is cheap in the space with an expense ratio of 0.35%.

The fund was up about 0.32% on the day, and returned about 25.85% in 2013.

PowerShares Dynamic Oil & Gas Services Fund (NYSEARCA:PXJ)

This product offers exposure to 30 energy stocks with SLB at the top position, allocating 5.18% of total assets. PXJ tracks the Dynamic Oil & Gas Services Intellidex Index and has amassed about $123.5 million thus far.  The ETF charges 62 bps in fees, so it is a bit more expensive than some of its counterparts in the space.

The fund added about 0.40% on the day of SLB’s earnings release, and 27.49% in 2013 (read: Is This the Top for Oil Service ETFs?).

Bottom Line

Schlumberger’s earnings have surprised the market for the last four quarters by decent margins and called for average surprise of 2.98%. This should serve as a cornerstone for the entire oil services industry. This week, we are due for earnings announcements from other sector behemoths including Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI).

While many are still not convinced about the prospect of oil-field services sector at this moment, risk-tolerant investors can buy in on the ongoing dip. And investors should note that the basket form of approach is always better than investing in a single company while it comes to playing a risky sector like what we are seeing with the oil field services space right now.

This article is brought to you courtesy of Eric Dutram.

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