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Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
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The US Treasury 6 Month Bill ETF (XBIL - Free Report) made its debut on 03/07/2023, and is a smart beta exchange traded fund that provides broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $505.60 million, this makes it one of the average sized ETFs in the Government Bond ETFs. XBIL is managed by Us Benchmark Series. This particular fund seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX before fees and expenses.
The ICE BofA US 6-Month Treasury Bill Index comprised of a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a newly selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, six months from the rebalancing date.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.15% for XBIL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.16%.
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.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
The ETF return is roughly 0.83% and it's up approximately 0% so far this year and in the past one year (as of 03/08/2024), respectively. XBIL has traded between $49.93 and $50.26 during this last 52-week period.
With about 2 holdings, it has more concentrated exposure than peers.
Alternatives
US Treasury 6 Month Bill ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
JPMorgan Ultra-Short Income ETF (JPST - Free Report) tracks N/A and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. JPMorgan Ultra-Short Income ETF has $22.57 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $31.25 billion. JPST has an expense ratio of 0.18% and BIL charges 0.14%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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 US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
The US Treasury 6 Month Bill ETF (XBIL - Free Report) made its debut on 03/07/2023, and is a smart beta exchange traded fund that provides broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $505.60 million, this makes it one of the average sized ETFs in the Government Bond ETFs. XBIL is managed by Us Benchmark Series. This particular fund seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX before fees and expenses.
The ICE BofA US 6-Month Treasury Bill Index comprised of a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a newly selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, six months from the rebalancing date.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.15% for XBIL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.16%.
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.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
The ETF return is roughly 0.83% and it's up approximately 0% so far this year and in the past one year (as of 03/08/2024), respectively. XBIL has traded between $49.93 and $50.26 during this last 52-week period.
With about 2 holdings, it has more concentrated exposure than peers.
Alternatives
US Treasury 6 Month Bill ETF is not a suitable option for investors seeking to outperform the Government Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
JPMorgan Ultra-Short Income ETF (JPST - Free Report) tracks N/A and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. JPMorgan Ultra-Short Income ETF has $22.57 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $31.25 billion. JPST has an expense ratio of 0.18% and BIL charges 0.14%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Government Bond 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.