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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
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The SPDR S&P Transportation ETF (XTN - Free Report) made its debut on 01/26/2011, and is a smart beta exchange traded fund that provides broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $481.82 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, XTN seeks to match the performance of the S&P Transportation Select Industry Index.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.87%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Fedex Corporation (FDX - Free Report) accounts for about 2.59% of the fund's total assets, followed by Hertz Global Holdings Inc (HTZ - Free Report) and Old Dominion Freight Line Inc. (ODFL - Free Report) .
Its top 10 holdings account for approximately 23.26% of XTN's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Transportation ETF has lost about -24.71% so far, and is down about -14.24% over the last 12 months (as of 07/27/2022). XTN has traded between $66.98 and $98.74 in this past 52-week period.
XTN has a beta of 1.29 and standard deviation of 31.70% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Transportation ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $835.32 million in assets, U.S. Global Jets ETF has $2.44 billion. IYT has an expense ratio of 0.41% and JETS charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
The SPDR S&P Transportation ETF (XTN - Free Report) made its debut on 01/26/2011, and is a smart beta exchange traded fund that provides broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $481.82 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, XTN seeks to match the performance of the S&P Transportation Select Industry Index.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.87%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Fedex Corporation (FDX - Free Report) accounts for about 2.59% of the fund's total assets, followed by Hertz Global Holdings Inc (HTZ - Free Report) and Old Dominion Freight Line Inc. (ODFL - Free Report) .
Its top 10 holdings account for approximately 23.26% of XTN's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Transportation ETF has lost about -24.71% so far, and is down about -14.24% over the last 12 months (as of 07/27/2022). XTN has traded between $66.98 and $98.74 in this past 52-week period.
XTN has a beta of 1.29 and standard deviation of 31.70% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Transportation ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $835.32 million in assets, U.S. Global Jets ETF has $2.44 billion. IYT has an expense ratio of 0.41% and JETS charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
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.