VanEck Oil Services UCITS ETF
- Exposure to a critical natural resource
- A necessary mean to preserve energy security and independence
- Oil ETF with a key role during the ongoing energy transition
- Proven inflation protection
OIHV
Marketing Communication
Basis-Ticker
Basis-Ticker
Basis-Ticker: OIHVISIN: IE000NXF88S1
TER: 35bps
AUM: $21.5 M (as of 06-11-2024)
SFDR Classification: Article 6
Lower risk
Typically lower rewardHigher risk
Typically higher reward1
2
3
4
5
6
7
Risk of Oil ETF: You may lose money up to the total loss of your investment due to Risk of Investing in the Oil Industry, Risk Associated with Fossil Fuels, Regulatory Risk and Concentration Risk as described in the Main Risk Factors, KID and prospectus.
VanEck Oil Services UCITS ETF
The Oil ETF by VanEck invests in companies active in the upstream oil sector. The portfolio comprises 25 US listed players who are classified as oil service providers. The Fund adopts a pure-play approach where included companies need to derive at least 50% of revenues from a set of relevant activities that have been identified. They include the following:
Manufacturing, repair and maintenance of equipment used in oil extraction and transportation. Examples of these include pressure vessels, pipes, compressors, pumps and many more.
Many drilling techniques currently exist, all characterized by different features and specifics. Some companies are specialized in offering state-of-the-art drilling equipment and services and are part of the VanEck Oil ETF.
Services of this kind include energy data management, formation evaluation, geological sciences and many others that help drive efficiencies in resource extraction and management.
Why Invest Now in the Oil Sector?
In order to satisfy a worldwide increasing energy demand, fueled by a growing population, an unprecedented mix of energy sources is needed. Moreover, the ongoing shift towards renewable energies and a carbon free economy poses additional challenges: the ambitious goals set by the Paris agreement will determine a major change in the energy sector. In this context traditional fossil fuels, like oil and gas, will help carry out this gradual transition and will play an important role for the years to come. Renewables remain in fact sometimes difficult to access. However, it should be noted that oil and fossil fuels in general are subject to many risks including regulatory ones.
Oil’s Share in Global Energy Consumption
Oil represents more than 30% of the total energy consumption. On the contrary, solar, wind, hydrogen and other renewables combined make up...
Oil represents more than 30% of the total energy consumption. On the contrary, solar, wind, hydrogen and other renewables combined make up...
A New Wave of Investments as Oil Becomes a Matter of National Security
In the wake of the geopolitical tensions that have dominated the headlines in 2022, oil has become a matter of vital security for most nations...
In the wake of the geopolitical tensions that have dominated the headlines in 2022, oil has become a matter of vital security for most nations...
How Could an Allocation to the Oil ETF Benefit an Investment Portfolio?
Natural resources have traditionally offered protection in inflationary times. When widespread price increases occur, oil tends to follow and trade at higher levels. Companies included in the Oil ETF, being strongly correlated with the price evolution of this natural resource, can benefit from this. This is particularly evident over the past two years when an unprecedented inflationary spiral has been accompanied by oil prices strongly on the rise. Naturally, past evolution cannot be an overly reliable indicator for future developments.
Source: VanEck, Bloomberg. The graph shows the evolution of the US CPI YoY (indicator for price changes in the US on a yearly basis. Thus, it is commonly adopted as a measure for inflation) and the price of oil (West Texas Intermediate).
Companies in the Oil ETF have traditionally exhibited a moderately low correlation to the broad stock market. This can help achieve higher diversification, especially useful when broad market declines take place. However, it is important to notice that broad stock market risk remains a concern that should not be overlooked. The following graph displays the correlation coefficient between the upstream oil sector and the stock market, for the past years.
Source: VanEck, Bloomberg.
Upstream oil sector represented by the MarketVector US Listed Oil Services 10% Capped Index, stock market represented by the MSCI World.
Key Documents and Links
Main Risk Factors of an Oil ETF
The Fund’s assets may be concentrated in one or more particular sectors or industries. The Fund may be subject to the risk that economic, political or other conditions that have a negative effect on the relevant sectors or industries will negatively impact the Fund's performance to a greater extent than if the Fund’s assets were invested in a wider variety of sectors or industries.
Investments in natural resources and natural resources companies, which include companies engaged in alternatives (e.g., water and alternative energy), base and industrial metals, energy and precious metals, are very dependent on the demand for, and supply and price of, natural resources and can be significantly affected by events relating to these industries, including international political and economic developments, embargoes, tariffs, inflation, weather and natural disasters, limits on exploration, often changes in the supply and demand for natural resources and other factors.
The prices of the securities in the Fund are subject to the risks associated with investing in the securities market, including general economic conditions and sudden and unpredictable drops in value. An investment in the Fund may lose money.
Please contact us for more information:
- Phone: +31 (0)20 719 51 00
- Email: EMEAinfo@vaneck.com