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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
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Looking for broad exposure to the Technology - Software segment of the equity market? You should consider the SPDR S&P Software & Services ETF (XSW - Free Report) , a passively managed exchange traded fund launched on 09/28/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $376.30 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
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 0.14%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 97% of the portfolio.
Looking at individual holdings, Cleanspark Inc (CLSK - Free Report) accounts for about 1.60% of total assets, followed by Microstrategy Inc Cl A (MSTR - Free Report) and Marathon Digital Holdings In (MARA - Free Report) .
The top 10 holdings account for about 10.35% of total assets under management.
Performance and Risk
So far this year, XSW return is roughly 0.61%, and it's up approximately 32.25% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $112.81 and $157.20.
The ETF has a beta of 1.12 and standard deviation of 28.95% for the trailing three-year period, making it a high risk choice in the space. With about 146 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 a great 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 AI and Next Gen Software ETF (IGPT - Free Report) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco AI and Next Gen Software ETF has $261 million in assets, iShares Expanded Tech-Software Sector ETF has $7.29 billion. IGPT has an expense ratio of 0.60% and IGV charges 0.41%.
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)?
Looking for broad exposure to the Technology - Software segment of the equity market? You should consider the SPDR S&P Software & Services ETF (XSW - Free Report) , a passively managed exchange traded fund launched on 09/28/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $376.30 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
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 0.14%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 97% of the portfolio.
Looking at individual holdings, Cleanspark Inc (CLSK - Free Report) accounts for about 1.60% of total assets, followed by Microstrategy Inc Cl A (MSTR - Free Report) and Marathon Digital Holdings In (MARA - Free Report) .
The top 10 holdings account for about 10.35% of total assets under management.
Performance and Risk
So far this year, XSW return is roughly 0.61%, and it's up approximately 32.25% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $112.81 and $157.20.
The ETF has a beta of 1.12 and standard deviation of 28.95% for the trailing three-year period, making it a high risk choice in the space. With about 146 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 a great 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 AI and Next Gen Software ETF (IGPT - Free Report) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco AI and Next Gen Software ETF has $261 million in assets, iShares Expanded Tech-Software Sector ETF has $7.29 billion. IGPT has an expense ratio of 0.60% and IGV charges 0.41%.
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.