new index ETF

[kongmen]

I would like to get opinions on the new ETF(ticker DRLL) as an investment going forward. It's expense ratio is high for an index ETF.



Thanks for any replies.

 

[braumeister]

Thread moved to correct forum.

 

[REWahoo]

Interesting investment strategy:

Backers Peter Thiel and Bill Ackman have sought to create an ETF [DRLL] with the purpose of promoting energy investment like more drilling. They want to push back against environmental, social and governance (or ESG) mandates which reward oil companies for lowering production.

 

[jazz4cash]

What is the index for this?

 

[MichaelB]

Looks similar to XLE, an ETF that invests in energy companies. Expense ratio for DRLL (0.43%) is 4x that of XLE (0.1%)

 

[Bigdawg]

I'm all for ETF's. I even like energy. This one has 1000 companies. .41 expense ratio is a bit high for me. I would go with VDE, .10 expense ratio.

 

[all4j]

The impression I got when skimming through their material is that this is more of a "political" statement than an investment. There are a few wrinkles between it & its competitors in the energy space, but none that struck me as significant.

That said, without regard to whether or not the asset space is a good investment going forward, I wouldn't take this as the vehicle. Note the small size of the fund. Means liquidity will be low, wide spreads. Coupled with the drag of expense ratio, I doubt the etf will get traction. Sometime down the road, it will be dissolved. Not meaning your investment will go to nothing, but that assets sold off & you'll get your "nav".

Why bother? If you want to support their message, have at it. Will cost a little, but not disaster. Happy investing -- let us know what you decide.

 

[Montecfo]

Here is their deal: typical fund managers vote your shares ignoring your wishes and they may simply kow-tow to big institutional owners. Idea here is to focus on investing, not politics or ESG since those metrics are not tied to long-term investment success.

It makes sense I think. I expect as the fund grows larger, expenses will come down.

 

[madatrub]

Most of the top 10 holdings are the same as XLE. Not sure what warrants a 4x higher ER

 

[copyright1997reloaded]

Most of the top 10 holdings are the same as XLE. Not sure what warrants a 4x higher ER

So perhaps emulate by buying XLE and shorting a few of the XLE members that are not in DRLL.

 

[madatrub]

So perhaps emulate by buying XLE and shorting a few of the XLE members that are not in DRLL.

Maybe. Its marketing itself as the Anti-ESG Energy ETF, but if the top 10 weightings are all the same, whats it really accomplishing? And I work in the field and know for a fact that some of those in the top 10 are certainly bought into the ESG stuff.