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Should You Invest in the Global X U.S. Electrification ETF (ZAP)?
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The Global X U.S. Electrification ETF (ZAP - Free Report) was launched on December 17, 2024, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $200.08 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. ZAP seeks to match the performance of the GLOBAL X U.S. ELECTRIFICATION INDEX before fees and expenses.
The Global X U.S. Electrification Index tracks the performance of U.S. listed companies domiciled in developed markets and involved in electrification.
Costs
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.
Annual operating expenses for this ETF are 0.5%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.94%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 76.2% of the portfolio, followed by Industrials.
Looking at individual holdings, Vistra Corp. (VST) accounts for about 6.23% of total assets, followed by Constellation Energy (CEG) and Quanta Services Inc (PWR).
The top 10 holdings account for about 43.46% of total assets under management.
Performance and Risk
So far this year, ZAP has gained about 23.55%. Since inception the fund has traded between $22.7 and $29.823.
With about 48 holdings, it has more concentrated exposure than peers.
Alternatives
Global X U.S. Electrification ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ZAP is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.23 billion in assets, Energy Select Sector SPDR ETF has $26.66 billion. VDE has an expense ratio of 0.09%, and XLE charges 0.08%.
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 Global X U.S. Electrification ETF (ZAP)?
The Global X U.S. Electrification ETF (ZAP - Free Report) was launched on December 17, 2024, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $200.08 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. ZAP seeks to match the performance of the GLOBAL X U.S. ELECTRIFICATION INDEX before fees and expenses.
The Global X U.S. Electrification Index tracks the performance of U.S. listed companies domiciled in developed markets and involved in electrification.
Costs
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.
Annual operating expenses for this ETF are 0.5%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.94%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 76.2% of the portfolio, followed by Industrials.
Looking at individual holdings, Vistra Corp. (VST) accounts for about 6.23% of total assets, followed by Constellation Energy (CEG) and Quanta Services Inc (PWR).The top 10 holdings account for about 43.46% of total assets under management.
Performance and Risk
So far this year, ZAP has gained about 23.55%. Since inception the fund has traded between $22.7 and $29.823.
With about 48 holdings, it has more concentrated exposure than peers.
Alternatives
Global X U.S. Electrification ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ZAP is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.23 billion in assets, Energy Select Sector SPDR ETF has $26.66 billion. VDE has an expense ratio of 0.09%, and XLE charges 0.08%.
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.