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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) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $431.09 million, this makes it one of the average sized ETFs in the Industrials ETFs. XTN is managed by State Street Global Advisors. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
ETFs offer 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.
XTN's heaviest allocation is in the Industrials sector, which is about 100% of the portfolio.
When you look at individual holdings, Atlas Air Worldwide Holdings Inc. accounts for about 3.13% of the fund's total assets, followed by Frontier Group Holdings Inc. (ULCC - Free Report) and Amerco .
The top 10 holdings account for about 25.1% of total assets under management.
Performance and Risk
The ETF has lost about -23.03% and is down about -20.84% so far this year and in the past one year (as of 11/29/2022), respectively. XTN has traded between $63.53 and $95.77 during this last 52-week period.
XTN has a beta of 1.30 and standard deviation of 32.59% 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 a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $772.04 million in assets, U.S. Global Jets ETF has $2.18 billion. IYT has an expense ratio of 0.39% 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) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $431.09 million, this makes it one of the average sized ETFs in the Industrials ETFs. XTN is managed by State Street Global Advisors. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
ETFs offer 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.
XTN's heaviest allocation is in the Industrials sector, which is about 100% of the portfolio.
When you look at individual holdings, Atlas Air Worldwide Holdings Inc. accounts for about 3.13% of the fund's total assets, followed by Frontier Group Holdings Inc. (ULCC - Free Report) and Amerco .
The top 10 holdings account for about 25.1% of total assets under management.
Performance and Risk
The ETF has lost about -23.03% and is down about -20.84% so far this year and in the past one year (as of 11/29/2022), respectively. XTN has traded between $63.53 and $95.77 during this last 52-week period.
XTN has a beta of 1.30 and standard deviation of 32.59% 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 a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $772.04 million in assets, U.S. Global Jets ETF has $2.18 billion. IYT has an expense ratio of 0.39% 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.