Designed to provide broad exposure to the Industrials - Transportation/Shipping segment of the equity market, the SPDR S&P Transportation ETF (
XTN Quick Quote XTN - Free Report) is a passively managed exchange traded fund launched on 01/26/2011.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $885.20 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. XTN seeks to match the performance of the S&P Transportation Select Industry Index before fees and expenses.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
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.
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 1.02%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Avis Budget Group Inc. (
CAR Quick Quote CAR - Free Report) accounts for about 4.05% of total assets, followed by Arcbest Corporation ( ARCB Quick Quote ARCB - Free Report) and Saia Inc. ( SAIA Quick Quote SAIA - Free Report) .
The top 10 holdings account for about 26.53% of total assets under management.
Performance and Risk
The ETF has added about 36.46% so far this year and was up about 32.79% in the last one year (as of 12/31/2021). In that past 52-week period, it has traded between $69.57 and $98.74.
The ETF has a beta of 1.31 and standard deviation of 29.54% for the trailing three-year period, making it a high risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
SPDR S&P Transportation 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, XTN is a great option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Transportation ETF (
IYT Quick Quote IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF ( JETS Quick Quote JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $1.85 billion in assets, U.S. Global Jets ETF has $3.19 billion. IYT has an expense ratio of 0.41% and JETS charges 0.60%. Bottom Line
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Zacks ETF Center.