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Should You Invest in the SPDR S&P Homebuilders ETF (XHB)?
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The SPDR S&P Homebuilders ETF (XHB - Free Report) was launched on 01/31/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Engineering and Construction segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 15, placing it in bottom 6%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $992.42 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. XHB seeks to match the performance of the S&P Homebuilders Select Industry Index before fees and expenses.
The S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders 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 0.94%.
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 Consumer Discretionary sector--about 52.90% of the portfolio, followed by Industrials.
Looking at individual holdings, Williams-Sonoma Inc. (WSM - Free Report) accounts for about 4.68% of total assets, followed by Floor & Decor Holdings Inc. Class A (FND - Free Report) and Lennox International Inc. (LII - Free Report) .
The top 10 holdings account for about 40.36% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Homebuilders ETF has lost about -26.40% so far, and is down about -25.92% over the last 12 months (as of 11/17/2022). XHB has traded between $52.03 and $86.27 in this past 52-week period.
The ETF has a beta of 1.32 and standard deviation of 36.90% for the trailing three-year period, making it a high risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Homebuilders ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XHB, 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 iShares U.S. Home Construction ETF (ITB - Free Report) tracks Dow Jones U.S. Select Home Construction Index. Invesco Dynamic Building & Construction ETF has $112.88 million in assets, iShares U.S. Home Construction ETF has $1.23 billion. PKB has an expense ratio of 0.57% and ITB charges 0.39%.
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 Homebuilders ETF (XHB)?
The SPDR S&P Homebuilders ETF (XHB - Free Report) was launched on 01/31/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Engineering and Construction segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 15, placing it in bottom 6%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $992.42 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. XHB seeks to match the performance of the S&P Homebuilders Select Industry Index before fees and expenses.
The S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders 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 0.94%.
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 Consumer Discretionary sector--about 52.90% of the portfolio, followed by Industrials.
Looking at individual holdings, Williams-Sonoma Inc. (WSM - Free Report) accounts for about 4.68% of total assets, followed by Floor & Decor Holdings Inc. Class A (FND - Free Report) and Lennox International Inc. (LII - Free Report) .
The top 10 holdings account for about 40.36% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Homebuilders ETF has lost about -26.40% so far, and is down about -25.92% over the last 12 months (as of 11/17/2022). XHB has traded between $52.03 and $86.27 in this past 52-week period.
The ETF has a beta of 1.32 and standard deviation of 36.90% for the trailing three-year period, making it a high risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Homebuilders ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XHB, 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 iShares U.S. Home Construction ETF (ITB - Free Report) tracks Dow Jones U.S. Select Home Construction Index. Invesco Dynamic Building & Construction ETF has $112.88 million in assets, iShares U.S. Home Construction ETF has $1.23 billion. PKB has an expense ratio of 0.57% and ITB charges 0.39%.
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.