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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?

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Designed to provide broad exposure to the Industrials ETFs category of the market, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.

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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.

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.

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

Because the fund has amassed over $200.99 million, this makes it one of the average sized ETFs in the Industrials ETFs. XTN is managed by State Street Global Advisors. Before fees and expenses, XTN seeks to match the performance of the S&P Transportation Select Industry Index.

The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.

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 XTN, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.99%.

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.

For XTN, it has heaviest allocation in the Industrials sector --about 100% of the portfolio.

When you look at individual holdings, Avis Budget Group Inc (CAR - Free Report) accounts for about 4.48% of the fund's total assets, followed by Uber Technologies Inc (UBER - Free Report) and Skywest Inc (SKYW - Free Report) .

The top 10 holdings account for about 31.17% of total assets under management.

Performance and Risk

The ETF has lost about -8.90% so far this year and was up about 0.56% in the last one year (as of 05/20/2025). In the past 52-week period, it has traded between $62.77 and $95.17.

The fund has a beta of 1.40 and standard deviation of 26.11% for the trailing three-year period, which makes XTN a high risk choice in this particular space. With about 45 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR S&P Transportation ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares U.S. Transportation ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $745.48 million in assets, U.S. Global Jets ETF has $850.10 million. IYT has an expense ratio of 0.39% and JETS charges 0.60%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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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