Looking for broad exposure to the Industrials - Transportation/Shipping segment of the equity market? You should consider the iShares U.S. Transportation ETF (
IYT Quick Quote IYT - Free Report) , a passively managed exchange traded fund launched on 10/06/2003.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
The fund is sponsored by Blackrock. It has amassed assets over $1.11 billion, making it one of the average sized ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. IYT seeks to match the performance of the Dow Jones Transportation Average Index before fees and expenses.
The S&P Transportation Select Industry FMC Capped Index (USD) measures the performance of companies from the Industrial Transportation, Airline and General Industrial Services industries of the U.S. equity market.
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 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.91%.
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 Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Union Pacific Corp (
UNP Quick Quote UNP - Free Report) accounts for about 19.35% of total assets, followed by United Parcel Service Inc Class B ( UPS Quick Quote UPS - Free Report) and Csx Corp ( CSX Quick Quote CSX - Free Report) .
The top 10 holdings account for about 74% of total assets under management.
Performance and Risk
So far this year, IYT has lost about -13.25%, and is down about -13.03% in the last one year (as of 05/18/2022). During this past 52-week period, the fund has traded between $228.42 and $279.97.
The ETF has a beta of 1.19 and standard deviation of 28.36% for the trailing three-year period, making it a high risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.
IShares U.S. 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, IYT 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.
SPDR S&P Transportation ETF (
XTN Quick Quote XTN - Free Report) tracks S&P Transportation Select Industry Index and the U.S. Global Jets ETF ( JETS Quick Quote JETS - Free Report) tracks U.S. Global Jets Index. SPDR S&P Transportation ETF has $640.50 million in assets, U.S. Global Jets ETF has $3.15 billion. XTN has an expense ratio of 0.35% and JETS charges 0.60%. 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.