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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
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Designed to provide broad exposure to the Industrials ETFs category of the market, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1 billion, making it one of the average sized ETFs in the Industrials ETFs. This particular fund 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.35% for XTN, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.34%.
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.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, Avis Budget Group Inc. (CAR - Free Report) accounts for about 4.05% of the fund's total assets, followed by Arcbest Corporation (ARCB - Free Report) and Saia Inc. (SAIA - Free Report) .
XTN's top 10 holdings account for about 26.53% of its total assets under management.
Performance and Risk
The ETF has lost about -6.69% and was up about 1.64% so far this year and in the past one year (as of 03/22/2022), respectively. XTN has traded between $79.02 and $98.74 during this last 52-week period.
The ETF has a beta of 1.30 and standard deviation of 30.26% 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.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.63 billion in assets, U.S. Global Jets ETF has $3.24 billion. IYT has an expense ratio of 0.41% 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?
Designed to provide broad exposure to the Industrials ETFs category of the market, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1 billion, making it one of the average sized ETFs in the Industrials ETFs. This particular fund 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.35% for XTN, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.34%.
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.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, Avis Budget Group Inc. (CAR - Free Report) accounts for about 4.05% of the fund's total assets, followed by Arcbest Corporation (ARCB - Free Report) and Saia Inc. (SAIA - Free Report) .
XTN's top 10 holdings account for about 26.53% of its total assets under management.
Performance and Risk
The ETF has lost about -6.69% and was up about 1.64% so far this year and in the past one year (as of 03/22/2022), respectively. XTN has traded between $79.02 and $98.74 during this last 52-week period.
The ETF has a beta of 1.30 and standard deviation of 30.26% 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.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $1.63 billion in assets, U.S. Global Jets ETF has $3.24 billion. IYT has an expense ratio of 0.41% 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.