2024-02-24 01:06:48 ET
Summary
- IGE is a passively managed ETF that tracks the S&P North American Natural Resources Sector Index.
- IGE and XLE have similar sector compositions, but IGE has a lower weighting in the top three holdings.
- IGE may provide a superior return due to overvaluation and overweighting of top holdings in XLE, the fund's similar risk return ratios, and larger expected multiple expansion for IGE.
The iShares North American Natural Resources ETF ( IGE ) is a passively managed exchange traded fund which tracks the S&P North American Natural Resources Sector Index. It provides exposure to natural resource equities located in North America, with an emphasis on oil & gas, mining, and forestry businesses. Its sector composition is broken down into 80% energy, 14% basic materials and 5.5% consumer cyclical. This composition is largely similar to XLE, the Energy Select Sector SPDR Fund, which is invested 100% in the energy sector, and warrants a comparison between the two funds. This comparison is also warranted by the fact that the top three holdings of the two funds are the same companies, although they differ in weight....
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IGE: Natural Resources Alternative To XLE