The combination of an Average People Pillar rating and a Below Average Process Pillar rating limit  VanEck Oil Services ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy earns a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an 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

Schlumberger

Halliburton

Baker Hughes Co

TechnipFMC

Weatherford International PLC

Valaris Ltd

Noble Corp PLC

Patterson-UTI Energy

ChampionX

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. VanEck Oil Services ETF earns a Below Average Process Pillar rating. The process is strengthened by the firm's five-year retention rate of 87% over the period. However, the rating is held back by the fund's unimpressive long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's subpar risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.7 stars, also holds the process back. 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 replicate as closely as possible, before fees and expenses, and the price and yield performance of the MVIS® US Listed Oil Services 25 Index.  The fund normally invests at least 80% of its total assets in securities that comprise the fund's benchmark index. The index includes common stocks and depositary receipts of U.S. exchange-listed companies in the oil services segment. Such companies may include small- and medium-capitalization companies and foreign companies that are listed on a U.S. exchange. The fund is non-diversified. 

 The portfolio is overweight in energy by 12.5 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 26 holdings and is relatively top-heavy. Of the strategy's assets, 73.7% are concentrated within the top 10 holdings, compared to the category’s 38.3% average. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

Below Average

Process

VanEck’s team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. The fund takes a solo manager approach, with Peter Liao as the only listed manager at the helm, who brings 17 years of portfolio management experience to the table. They manage over 25 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. With only one manager listed on the strategy, the passive strategy is vulnerable to key-person risk. 

 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.

Average

People

VanEck’s ownership structure and specialization make it unique among industry peers. The firm’s founding family and namesake still have control, and its product lineup still reflects its legacy as a specialist in niche market segments. VanEck earns an Average Parent Pillar rating. 

Founded by John van Eck in 1955, the firm staked its claim in the industry by capitalizing on burgeoning markets. Starting with the opening of Western Europe to U.S.-based investors in the wake of the Marshall Plan, VanEck’s largest and most successful products provide exposure to areas of the market that are off the beaten path, such as hard assets, emerging-markets debt, and below-investment-grade-rated corporate debt.

Through its history, VanEck has taken an opportunistic approach to product development. For instance, since 2018, VanEck has launched strategies that provide exposures ranging from international REITs to companies involved in video game development. Regardless of where their reach takes them, however, VanEck builds a case that the strategy will be relevant over the long term and that its risks must be easy to understand. However, not all its products catch on, and the firm has shuttered several offerings in the last decade. 

VanEck remains a privately held firm, wholly owned by CEO Jan van Eck and his family. Although this enables the firm to focus on the long term and the firm offers some employees participation in profits, the firm hasn’t used equity as a recruiting and retention tool and introduces some key-person risk in the executive suite.

Parent

VanEck Vectors Oil Services ETF

OIH tracks a market-cap-weighted index of 25 of the largest US-listed, publicly traded oil services companies.

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Spot global crude oil futures traded at a discount to longer-dated contracts this week for the first time in four months, a signal that traders believe the market has become oversupplied and inventories are poised to build.

Oil futures spreads signal market moving toward oversupply

The U.S. on Thursday extended through May 16 a license allowing four oilfield service firms to maintain their current assets in Venezuela, while restricting what services they can perform in the country.

US renews license to oil service firms in Venezuela on same terms

Rising U.S. crude inventories served as an additional bearish catalyst for the oil markets.

Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Dives 5% On Demand Concerns

Oil prices plummeted on Thursday as traders took in higher US inventories and waning demand in China. The US crude inventories jumped by 3.6 million barrels last week, the EIA said Wednesday.

Oil prices plunge as US inventories jump and worries build over China demand

The U.S. reported that crude inventories rose by 3.6 million barrels last week while production held steady at a record 13.2 million barrels per day.

U.S. crude prices fall nearly 4% as inventories rise

The crude oil market fell slightly during the opening hours on Thursday, but also has shown a bit of resiliency.

Crude Oil Price Forecast – Crude Oil Markets Dropped Slightly to Kick Off Thursday Session

Oil futures edged lower early Thursday, feeling continued pressure after data released during the previous session showed a sharp rise in U.S. crude inventories over the past two weeks.

Oil prices extend decline after further rise in U.S. crude inventories

A look at the day ahead in U.S. and global markets from Mike Dolan

Morning Bid: Ebbing oil sustains inflation, retail glow

Norwegian oil and gas companies plan to invest more in 2023 and 2024 than previously thought as inflation drives up the cost of field developments, a national statistics office (SSB) survey showed on Thursday.

Norway oil companies face higher investment costs due inflation

Brent and WTI crude prices fall due to increased U.S. supply and uncertain demand from China.

Oil Prices Forecast: Rising US Supply Clashes With China's Demand Woes

Oil prices dropped on Thursday, extending losses from the previous session, as signals of higher supply from the United States met worries about lackluster energy demand from Asia.

Oil prices dip on US crude build, Asia demand worries

U.S. oil futures settled lower on Wednesday for the first time in five sessions after the Energy Information Administration reported a more than 17 million-barrel climb in U.S. commercial crude inventories for the two-week period ending Nov. 10. Meanwhile, domestic oil production holding steady at a record high 13.2 million barrels per day and a near 2 million-barrel rise in crude stocks at the Cushing, Okla.

U.S. oil prices mark first loss in 5 sessions

U.S. oil inventories increased by 3.6 million barrels in the week ended Nov. 10, above forecasts calling for a rise of 800,000 barrels.

U.S. Crude-Oil Inventories Rise by 3.6 Million Barrels

The strong economic data from China did not provide support to oil markets today.

Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Retreats On Demand Concerns

U.S. crude oil stockpiles jumped last week, while gasoline inventories posted a surprise draw as refineries picked up runs amid seasonally strong demand, the Energy Information Administration said on Wednesday.

US crude stockpiles rise, fuel draws down last week - EIA

The Energy Information Administration on Wednesday reported that U.S. commercial crude inventories rose by 3.6 million barrels for the week ended Nov. 10 to total 439.4 million barrels. The government agency had delayed last week's data due to a systems upgrade and reported on Wednesday a commercial crude supply total of 435.8 million barrels for the week ended Nov. 3.

EIA reports gain in U.S. crude supplies last week

The report showed that gasoline inventories declined for two consecutive weeks.

WTI Oil Rebounds From Session Lows As Gasoline Inventories Fall

Crude oil markets have fallen during the trading session on Wednesday, as the market continues to see a lot of questions about the economy.

Crude Oil Price Forecast – Crude Oil Markets Fall

Oil futures lost ground Wednesday as investors awaited a double dose of U.S. data on petroleum supplies.

Oil prices edge lower ahead of data on U.S. crude supplies

Bullish oil market outlook persists despite potential 2024 surplus, reflecting strategic OPEC production decisions and inventory changes.

Oil Prices Forecast: WTI, Brent Underpinned by Weaker Dollar

U.S. oil pipeline and export terminal operators are stepping up quality checks after finding an out-of-specification cargo that raised worries of excess metals contaminating Texas shale oil, operators and sources said.

Texas crude quality checks rise after excess metal found in oil export

Global oil markets are expected to be fairly balanced with a slight surplus next year as demand and non-OPEC supply growth are exceeding expectations, the global head of research at Vitol (VITOLV.UL) said on Wednesday.

Global oil markets to be fairly balanced in 2024 - Vitol

Oil prices rose in early Asian trade on Wednesday on Middle East tensions and a weaker dollar, while investors focused on inventory data after a two week delay in reporting.

Oil gains on Middle East tensions, stock data in focus

U.S. oil futures settled unchanged on Tuesday, giving up earlier gains as traders awaited Wednesday's release of the Energy Information Administration's petroleum supply report. The government agency will release two weeks' worth of data, for the weeks ended Nov. 3 and Nov. 10, after a systems upgrade led to a delay in last week's data releases.

U.S. oil prices settle unchanged ahead of weekly domestic supply data

Oil is moving away from recent lows as traders focus on rising demand.

News for VanEck Vectors Oil Services ETF ETF (OIH)