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Is SPDR NYSE Technology ETF (XNTK) a Strong ETF Right Now?
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Launched on 09/25/2000, the SPDR NYSE Technology ETF (XNTK - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XNTK has amassed assets over $655.59 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE Technology Index.
The NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies.
Cost & Other Expenses
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.
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 0.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 70% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Taking into account individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 4.66% of the fund's total assets, followed by Tesla Inc (TSLA - Free Report) and Sea Ltd. (singapore) Sponsored Adr Class A (SE - Free Report) .
Its top 10 holdings account for approximately 38.14% of XNTK's total assets under management.
Performance and Risk
The ETF has lost about -10.11% so far this year and was up about 1.73% in the last one year (as of 01/20/2022). In the past 52-week period, it has traded between $135.48 and $175.28.
XNTK has a beta of 1.12 and standard deviation of 28.90% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $47.88 billion in assets, Vanguard Information Technology ETF has $51.34 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 NYSE Technology ETF (XNTK) a Strong ETF Right Now?
Launched on 09/25/2000, the SPDR NYSE Technology ETF (XNTK - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by State Street Global Advisors, XNTK has amassed assets over $655.59 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NYSE Technology Index.
The NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies.
Cost & Other Expenses
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.
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 0.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 70% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Taking into account individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 4.66% of the fund's total assets, followed by Tesla Inc (TSLA - Free Report) and Sea Ltd. (singapore) Sponsored Adr Class A (SE - Free Report) .
Its top 10 holdings account for approximately 38.14% of XNTK's total assets under management.
Performance and Risk
The ETF has lost about -10.11% so far this year and was up about 1.73% in the last one year (as of 01/20/2022). In the past 52-week period, it has traded between $135.48 and $175.28.
XNTK has a beta of 1.12 and standard deviation of 28.90% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $47.88 billion in assets, Vanguard Information Technology ETF has $51.34 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.