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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
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Launched on 01/26/2011, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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 managed by State Street Global Advisors, and has been able to amass over $256.67 million, which makes it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, XTN 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
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.
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 0.92%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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, United Airlines Holdings Inc. (UAL - Free Report) accounts for about 2.65% of total assets, followed by Landstar System Inc. (LSTR - Free Report) and Avis Budget Group Inc. (CAR - Free Report) .
The top 10 holdings account for about 25.48% of total assets under management.
Performance and Risk
So far this year, XTN has added about 13.66%, and is down about -5.92% in the last one year (as of 01/30/2023). During this past 52-week period, the fund has traded between $63.53 and $91.65.
XTN has a beta of 1.30 and standard deviation of 32.82% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 53 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 $769.29 million in assets, U.S. Global Jets ETF has $2.15 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?
Launched on 01/26/2011, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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 managed by State Street Global Advisors, and has been able to amass over $256.67 million, which makes it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, XTN 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
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.
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 0.92%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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, United Airlines Holdings Inc. (UAL - Free Report) accounts for about 2.65% of total assets, followed by Landstar System Inc. (LSTR - Free Report) and Avis Budget Group Inc. (CAR - Free Report) .
The top 10 holdings account for about 25.48% of total assets under management.
Performance and Risk
So far this year, XTN has added about 13.66%, and is down about -5.92% in the last one year (as of 01/30/2023). During this past 52-week period, the fund has traded between $63.53 and $91.65.
XTN has a beta of 1.30 and standard deviation of 32.82% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 53 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 $769.29 million in assets, U.S. Global Jets ETF has $2.15 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.