A sound investment process and strong management team underpin iShares US Oil & Gas Explor & Prod ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in volatility exposure and quality exposure compared with category peers. High volatility exposure is attributed to companies with a higher standard deviation of returns. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

ConocoPhillips

EOG Resources

Marathon Petroleum

Pioneer Natural Resources

Phillips 66

Diamondback Energy

Valero Energy

Hess

Devon Energy

Coterra Energy

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares US Oil & Gas Explor & Prod ETF earns an Above Average Process Pillar rating. The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Noteworthy risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Dow Jones U.S. Select Oil Exploration & Production Index composed of U.S. equities in the oil and gas exploration and production sector.  The fund will invest at least 80% of its assets in the component securities of the index and in investments that are substantially identical to the component securities of the index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the index, and but which BFA believes will help the fund track the index. The fund is non-diversified. 

 The portfolio is overweight in energy by 13.1 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are utilities and industrials, with utilities underweighting the average portfolio by 7.4 percentage points of assets and industrials similar to the average. The portfolio is composed of 50 holdings and is relatively top-heavy. Of the strategy's assets, 69.8% are concentrated within the top 10 holdings, as opposed to the typical peer's 38.3%. And in closing, in terms of portfolio turnover, this fund trades less regularly than the typical peer in its category, which may result in a lower cost to investors.

Above Average

Process

iShares’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are three managers listed on the fund: Greg Savage, Paul Whitehead, Jennifer Hsui. Experience on the team is abundant, with 17 years of average portfolio management experience. Together, they manage a total of 258 strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares U.S. Oil & Gas Exploration & Production ETF

IEO tracks a market cap weighted index of companies in the U.S. oil and gas exploration and production space according to Dow Jones.

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ProShares Ultra Bloomberg Crude Oil

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Oil prices fell amid OPEC+ cut announcements and enforcement doubts, with market skepticism setting a bearish tone, yet compliance may shift outlook.

Oil Prices Forecast: Skepticism Shadows OPEC+ Production Cuts

Oil futures finished lower on Friday for a second session in a row. Traders looked to a decision by OPEC+ to cut production further in the first quarter with skepticism.

Oil futures mark back-to-back losses with traders skeptical of OPEC+ output cuts

The U.S. Department of Energy has sped up the return of 4 million barrels of oil to the Strategic Petroleum Reserve, from a previous exchange of crude to energy companies, as it seeks to replenish the stockpile after a record drawdown last year, it said on Friday.

US speeds up return of oil to Strategic Petroleum Reserve -Energy Dept

Today's article explores OPEC's motivations for cutting oil production by 1 million barrels per day, and why those goals contrast with those of net crude oil-importing nations.

Decoding What OPEC Wants

OPEC+ production cuts, which were announced on Thursday, did not provide support to oil markets.

Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats Ahead Of The Weekend

Crude oil markets were all over the place during the course of the trading week, as we try to sort out what we are going to do next. All things being equal, this is a situation where I think you have buyers coming back into the market, but not enough.

Crude Oil Weekly Price Forecast – Crude Oil Markets Continue To Chop Sideways

At COP28, policymakers, experts, scientists, advocates, farmers, young people, and passionate eaters will come together to guide the world forward.

For Global Leaders At COP28, It's Time To Turn Talk Into Action

Crude oil markets have been all over the place over the last couple of days, as we continue to bounce around in a well-defined consolidation region.

Crude Oil Price Forecast – Crude Oil Markets Continue To Show Volatility

Energy Select Sector SPDR Fund

The price of WTI and Brent crude fell despite another production cut from OPEC. The cut was expected and helps keep the oil market in a tight balance, so this looks like a buy-the-rumor-sell-the-news event.

Energy traders sell the OPEC news; a rebound is coming

Murphy Oil

Suncor Energy

While OPEC's latest cut failed to buy oil prices, there is a significant opportunity to be had for investors who are willing. We suggest buying stocks like SU, EOG and MUR.

How Will the OPEC Supply Cuts and Brazil's Entry Impact Oil?

Investors are wary that the Saudi-led group won't stay on the same page in 2024.

Wall Street Shrugs Off Latest OPEC+ Oil Cuts

Occidental's talks with CrownRock will make the few remaining large parcels in the Permian basin pricey.

U.S. Oil Land Grab Continues

Oil prices exhibit stabilization following OPEC+'s production cuts, with Brent crude and WTI futures experiencing modest increases amid market skepticism.

Natural Gas and Oil Analysis: Market Reactions to OPEC+ Decisions and Technical Trends

Some of the world's biggest charities have joined forces with the World Bank's private investment arm in a climate financing venture to try to generate $11 billion in investments in developing countries.

Exclusive: At COP28, donors join IFC to lure $11 bln in climate cash

Oil futures rose Friday, attempting to find their footing and on track for weekly gains, after slumping the previous session after the outcome of an eagerly awaited OPEC+ meeting left traders unconvinced producers will fully deliver additional production cuts.

Oil prices stabilize after slumping on OPEC+ disappointment

COP28 will not seriously address the problem of energy poverty, because it requires either expensive renewables or 'bad' fossil fuels.

COP28 Will Generate Headlines But Not Much Else

Goldman Sachs analysts still expect prices to range between $80 to $100 a barrel next year.

Oil Prices May Return to $100. Why They Won't Stay Low Forever Thanks to OPEC.

Individual countries announced voluntary reductions totaling 2.2 million barrels per day for the first quarter of 2024.

Oil prices could reach $100 a barrel in 2024 if OPEC+ members fulfil pledges for voluntary cuts

OPEC+'s latest strategy, impacting crude oil futures, seeks to adjust supply in response to 2024's economic outlook.

Oil Prices Forecast: Mixed Reactions to OPEC+'s Production Strategy

Oil prices fell in early Asian trade on Friday, extended losses after OPEC+ producers agreed to voluntary oil output cuts for the first quarter next year that fell short of market expectations.

Oil prices fall, extend slide after OPEC+ cuts underwhelm

OPEC+ announced Thursday that it is deepening oil production cuts, but crude prices actually dropped amid investor skepticism over the supply curb.

Saudi Arabia extends oil production cuts into start of 2024

Despite the total cuts by all countries added at the November 30th OPEC+ meeting, oil sold off testing key support. Countries like Angola have threatened not to stick to the new quota, promising to produce above target.

Skepticism Over the OPEC + Oil Cuts

This year's COP28 climate summit, being held in the glitzy Middle East city of Dubai, clicks into its first full day of scheduled events on Friday.

What to watch at COP28 on Friday?

A skeptical crude oil market was seeking another 'Saudi Lollipop' but got treated to an unedifying OPEC+ fudge instead as the group offered 2.2 mbpd in voluntary cuts.

OPEC+ Switches From ‘Saudi Lollipop' To A Group Fudge Of Voluntary Output Cuts

Gas prices were finally starting to go down, but a new OPEC+ deal means they're expected to rise soon.

News for iShares U.S. Oil & Gas Exploration & Production ETF ETF (IEO)