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Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
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Making its debut on 03/07/2023, smart beta exchange traded fund US Treasury 6 Month Bill ETF (XBIL - Free Report) provides investors broad exposure to the Government Bond 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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
XBIL is managed by Us Benchmark Series, and this fund has amassed over $648.75 million, which makes it one of the average sized ETFs in the Government Bond ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 4.89%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
The top 10 holdings account for about 100% of total assets under management.
Performance and Risk
The ETF has gained about 0.21% and was up about 4.97% so far this year and in the past one year (as of 01/23/2025), respectively. XBIL has traded between $49.89 and $50.21 during this last 52-week period.
The fund has a beta of 0 and standard deviation of 0.40% for the trailing three-year period. With about 2 holdings, it has more concentrated exposure than peers.
Alternatives
US Treasury 6 Month Bill ETF is a reasonable option for investors seeking to outperform the Government Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares 0-3 Month Treasury Bond ETF (SGOV - Free Report) tracks ICE 0-3 MONTH US TREASURY SECURITIES IND and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. IShares 0-3 Month Treasury Bond ETF has $31.71 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $37.01 billion. SGOV has an expense ratio of 0.09% 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?
Making its debut on 03/07/2023, smart beta exchange traded fund US Treasury 6 Month Bill ETF (XBIL - Free Report) provides investors broad exposure to the Government Bond 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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
XBIL is managed by Us Benchmark Series, and this fund has amassed over $648.75 million, which makes it one of the average sized ETFs in the Government Bond ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 4.89%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
The top 10 holdings account for about 100% of total assets under management.
Performance and Risk
The ETF has gained about 0.21% and was up about 4.97% so far this year and in the past one year (as of 01/23/2025), respectively. XBIL has traded between $49.89 and $50.21 during this last 52-week period.
The fund has a beta of 0 and standard deviation of 0.40% for the trailing three-year period. With about 2 holdings, it has more concentrated exposure than peers.
Alternatives
US Treasury 6 Month Bill ETF is a reasonable option for investors seeking to outperform the Government Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares 0-3 Month Treasury Bond ETF (SGOV - Free Report) tracks ICE 0-3 MONTH US TREASURY SECURITIES IND and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. IShares 0-3 Month Treasury Bond ETF has $31.71 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $37.01 billion. SGOV has an expense ratio of 0.09% 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.