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Is SPDR NYSE Technology ETF (XNTK) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR NYSE Technology ETF (XNTK - Free Report) debuted on 09/25/2000, and offers broad exposure to the Technology ETFs category of the market.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XNTK has been able to amass assets over $806.88 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, XNTK seeks to match the performance of the NYSE Technology Index.
The NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies.
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 this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.30%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XNTK's heaviest allocation is in the Information Technology sector, which is about 66.30% of the portfolio. Its Telecom and Consumer Discretionary round out the top three.
When you look at individual holdings, Meta Platforms Inc Class A (META - Free Report) accounts for about 5.23% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Uber Technologies Inc (UBER - Free Report) .
XNTK's top 10 holdings account for about 39.09% of its total assets under management.
Performance and Risk
The ETF has added about 10.76% so far this year and is up about 67.14% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $111.21 and $184.73.
The ETF has a beta of 1.25 and standard deviation of 28.30% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $64.50 billion in assets, Vanguard Information Technology ETF has $65.49 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 NYSE Technology ETF (XNTK) a Strong ETF Right Now?
A smart beta exchange traded fund, the SPDR NYSE Technology ETF (XNTK - Free Report) debuted on 09/25/2000, and offers broad exposure to the Technology ETFs category of the market.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XNTK has been able to amass assets over $806.88 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, XNTK seeks to match the performance of the NYSE Technology Index.
The NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies.
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 this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.30%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XNTK's heaviest allocation is in the Information Technology sector, which is about 66.30% of the portfolio. Its Telecom and Consumer Discretionary round out the top three.
When you look at individual holdings, Meta Platforms Inc Class A (META - Free Report) accounts for about 5.23% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Uber Technologies Inc (UBER - Free Report) .
XNTK's top 10 holdings account for about 39.09% of its total assets under management.
Performance and Risk
The ETF has added about 10.76% so far this year and is up about 67.14% in the last one year (as of 03/14/2024). In the past 52-week period, it has traded between $111.21 and $184.73.
The ETF has a beta of 1.25 and standard deviation of 28.30% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $64.50 billion in assets, Vanguard Information Technology ETF has $65.49 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.