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  • Prospect of a 50% rise in iShares U.S. Oil Equipment & Services ETF units due to higher oil prices
Max Manturov

Max Manturov

Head of investment research regulated by CySec 14.03.2022

Prospect of a 50% rise in iShares U.S. Oil Equipment & Services ETF units due to higher oil prices

The record rise in oil prices is linked to the imposition of sanctions against Russia. Market participants are focused on the situation in Ukraine and Washington's decision to refuse imports of Russian oil. If most Western countries follow the US’s lead and impose bans on oil supplies from Russia, quotations may exceed $150 per barrel.

Some European countries have already supported the decision to reject Russian oil and have also announced cuts in oil and gas supplies from Russia. Against this backdrop, investors should consider ETFs from the oil services sector, including the SPDR S&P Oil & Gas Equipment & Services ETF (XES), iShares U.S. Oil Equipment & Services ETF and VanEck Oil Services ETF

Ticker: IEZ.US
Entry price: $18
Target price: $27
Growth potential: 50%
Time horizon: 12 months
Risk: High
Position size: 2%
Current dividend yield: 1.02%

About the ETF fund

IEZ.US tracks the investment performance of an index that covers US companies in the oil equipment and services sector.

The ETF fund includes such major issuers as Baker Hughes Company (BKR.US) - 21.97%, Schlumberger Limited (SLB.US) - 21.16%, Helmerich & Payne (HP.US) - 5.44%, Halliburton Company (HAL.US) - 4.84%, NOV (NOV.US) - 4.85%.

Important indicators:

  • Assets under management, AUM - $252.9m.
  • Number of share names in the ETF - 24
  • Expense Ratio - 0.41%.
  • PE ratio - 33.24x
  • ETF yield over the last 6 months - 34.06%

In addition to iShares U.S. Oil Equipment & Services, other ETFs are worth considering are:

Buying units of these ETFs offers an opportunity to capitalise on the worsening energy crisis. Rising oil prices will increase demand for companies in the oil industry. An increase in demand for their services is expected to boost the business performance of these issuers.

How to take advantage of the idea?

  1. Buy ETF at a price of $18.
  2. Allocate no more than 2% of your portfolio for purchase. To compile a balanced portfolio, you can use the recommendations of our analysts.
  3. Sell when the price reaches $27.

How to Buy ETFs?

If you don't have an investment account yet, open it now: this can be done online, in just 10 minutes. All you need to do is fill out a short form and verify your account.

After opening an account, you can buy ETFs in either of the following ways:

Freedom24 Web Platform: In the Web Terminal section, type in the search box, and select the appropriate ETF in the results. Open a secure session in the trading window on the right, select the number of securities you want to buy, and click Buy.

Freedom24 iPhone or Android App: Go to the Price screen and tab the search icon in the top right corner. In the search dialog that will show up, type and select the appropriate ETF in the results. You will then see the ETF in the market watch; tap it and go to the Order tab in the dialog that shows up. Specify the number of securities you want to buy and click Buy.

Buy iShares U.S. Oil Equipment & Services ETF >>

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Europe Ltd or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance Europe Ltd. do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance Europe Ltd. and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.

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