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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
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The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $392.62 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. XSW seeks to match the performance of the S&P Software & Services Select Industry Index before fees and expenses.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 95.70% of the portfolio.
Looking at individual holdings, Cleanspark Inc. (CLSK - Free Report) accounts for about 0.88% of total assets, followed by Veritone Inc. (VERI - Free Report) and Marathon Digital Holdings Inc (MARA - Free Report) .
The top 10 holdings account for about 7.60% of total assets under management.
Performance and Risk
The ETF return is roughly 7.59% and is up about 7.59% so far this year and in the past one year (as of 12/20/2021), respectively. XSW has traded between $150.10 and $186.85 during this last 52-week period.
The ETF has a beta of 1.16 and standard deviation of 27.49% for the trailing three-year period, making it a high risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Software & Services ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSW is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $392.34 million in assets, iShares Expanded TechSoftware Sector ETF has $5.90 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.43%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $392.62 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. XSW seeks to match the performance of the S&P Software & Services Select Industry Index before fees and expenses.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 95.70% of the portfolio.
Looking at individual holdings, Cleanspark Inc. (CLSK - Free Report) accounts for about 0.88% of total assets, followed by Veritone Inc. (VERI - Free Report) and Marathon Digital Holdings Inc (MARA - Free Report) .
The top 10 holdings account for about 7.60% of total assets under management.
Performance and Risk
The ETF return is roughly 7.59% and is up about 7.59% so far this year and in the past one year (as of 12/20/2021), respectively. XSW has traded between $150.10 and $186.85 during this last 52-week period.
The ETF has a beta of 1.16 and standard deviation of 27.49% for the trailing three-year period, making it a high risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Software & Services ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSW is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded TechSoftware Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $392.34 million in assets, iShares Expanded TechSoftware Sector ETF has $5.90 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.43%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.