Beware of These 3 Funds – You May Be VERY Overweight In XOM Stock

Odds are you already own plenty of Exxon shares

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Beware of These 3 Funds – You May Be VERY Overweight In XOM Stock

iShares Morningstar Large-Cap Value (JKF)

iShares185 Beware of These 3 Funds   You May Be VERY Overweight In XOM StockXOM Stock Weight: 10%

With a forward P/E ratio of 12 and a hefty 2.6% dividend yield, XOM stock is firmly in the “value” stock category. In fact, more than 842 different value ETFs and mutual funds hold XOM shares. The iShares Morningstar Large-Cap Value (JKF) perhaps holds the most of its assets in Exxon.

Tracking an index created by fund rating agency Morningstar (MORN), JKF focuses on large-cap stocks that have exhibited above-average value characteristics. Given the underperformance of XOM stock over the last few years, it fits the cheapness required of JKF’s underlying index.

Perhaps a bit too well.

Overall, XOM stock makes up nearly 10% of the ETF’s assets. Again, that may not be too bad in its own right. After all, XOM stock is still a great long-term investment. The lesson, though, is that if you’re looking to add XOM because you believe it’s a “value” among large-cap energy producers, odds are your value fund already has a huge slug of it.

Being too overweight could prove problematic if things don’t turn out as planned.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/12/xom-stock-iye-jkf-vti/.

©2014 InvestorPlace Media, LLC

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