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Should You Invest in the iShares U.S. Home Construction ETF (ITB)?
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Launched on 05/01/2006, the iShares U.S. Home Construction ETF (ITB - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Engineering and Construction segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.11 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. ITB seeks to match the performance of the Dow Jones U.S. Select Home Construction Index before fees and expenses.
The Dow Jones U.S. Select Home Builders Index is a subset of the Dow Jones U.S. Household Goods Index. It is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.86%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 79.20% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, D R Horton Inc (DHI - Free Report) accounts for about 14.61% of total assets, followed by Lennar A Corp (LEN - Free Report) and Nvr Inc (NVR - Free Report) .
The top 10 holdings account for about 61.66% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Home Construction ETF has lost about -32.63% so far, and is down about -24.28% over the last 12 months (as of 11/03/2022). ITB has traded between $49.13 and $83.04 in this past 52-week period.
The ETF has a beta of 1.35 and standard deviation of 40.58% for the trailing three-year period, making it a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Home Construction ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. ITB, then, is not the best option for investors seeking exposure to the Industrials ETFs segment of the market. However, there are better ETFs in the space to consider.
Invesco Dynamic Building & Construction ETF (PKB - Free Report) tracks Dynamic Building & Construction Intellidex Index and the SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index. Invesco Dynamic Building & Construction ETF has $105.11 million in assets, SPDR S&P Homebuilders ETF has $971.96 million. PKB has an expense ratio of 0.60% and XHB charges 0.35%.
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 iShares U.S. Home Construction ETF (ITB)?
Launched on 05/01/2006, the iShares U.S. Home Construction ETF (ITB - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Engineering and Construction segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.11 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. ITB seeks to match the performance of the Dow Jones U.S. Select Home Construction Index before fees and expenses.
The Dow Jones U.S. Select Home Builders Index is a subset of the Dow Jones U.S. Household Goods Index. It is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.86%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 79.20% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, D R Horton Inc (DHI - Free Report) accounts for about 14.61% of total assets, followed by Lennar A Corp (LEN - Free Report) and Nvr Inc (NVR - Free Report) .
The top 10 holdings account for about 61.66% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Home Construction ETF has lost about -32.63% so far, and is down about -24.28% over the last 12 months (as of 11/03/2022). ITB has traded between $49.13 and $83.04 in this past 52-week period.
The ETF has a beta of 1.35 and standard deviation of 40.58% for the trailing three-year period, making it a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Home Construction ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. ITB, then, is not the best option for investors seeking exposure to the Industrials ETFs segment of the market. However, there are better ETFs in the space to consider.
Invesco Dynamic Building & Construction ETF (PKB - Free Report) tracks Dynamic Building & Construction Intellidex Index and the SPDR S&P Homebuilders ETF (XHB - Free Report) tracks S&P Homebuilders Select Industry Index. Invesco Dynamic Building & Construction ETF has $105.11 million in assets, SPDR S&P Homebuilders ETF has $971.96 million. PKB has an expense ratio of 0.60% and XHB charges 0.35%.
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.