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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
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The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $220.40 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. XSW seeks to match the performance of the S&P Software & Services Select Industry Index before fees and expenses.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.14%.
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 Information Technology sector--about 93.90% of the portfolio.
Looking at individual holdings, Riot Platforms Inc. (RIOT - Free Report) accounts for about 1.23% of total assets, followed by Marathon Digital Holdings Inc (MARA - Free Report) and Microstrategy Incorporated Class A (MSTR - Free Report) .
The top 10 holdings account for about 8.70% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Software & Services ETF has added roughly 5.64% so far, and is down about -6.33% over the last 12 months (as of 05/09/2023). XSW has traded between $102 and $131.64 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 29.79% for the trailing three-year period, making it a high risk choice in the space. With about 158 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Software & Services ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSW is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $178.82 million in assets, iShares Expanded Tech-Software Sector ETF has $5.06 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.40%.
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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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $220.40 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. XSW seeks to match the performance of the S&P Software & Services Select Industry Index before fees and expenses.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.14%.
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 Information Technology sector--about 93.90% of the portfolio.
Looking at individual holdings, Riot Platforms Inc. (RIOT - Free Report) accounts for about 1.23% of total assets, followed by Marathon Digital Holdings Inc (MARA - Free Report) and Microstrategy Incorporated Class A (MSTR - Free Report) .
The top 10 holdings account for about 8.70% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Software & Services ETF has added roughly 5.64% so far, and is down about -6.33% over the last 12 months (as of 05/09/2023). XSW has traded between $102 and $131.64 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 29.79% for the trailing three-year period, making it a high risk choice in the space. With about 158 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Software & Services ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSW is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $178.82 million in assets, iShares Expanded Tech-Software Sector ETF has $5.06 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.40%.
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.