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Should You Invest in the Global X U.S. Electrification ETF (ZAP)?
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Designed to provide broad exposure to the Energy - Broad segment of the equity market, the Global X U.S. Electrification ETF (ZAP - Free Report) is a passively managed exchange traded fund launched on December 17, 2024.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $234.9 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.28%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 74.8% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Ametek Inc (AME) accounts for about 4.29% of total assets, followed by American Electric Power (AEP) and Quanta Services Inc (PWR).
The top 10 holdings account for about 40.93% of total assets under management.
Performance and Risk
The ETF has gained about 23.87% so far this year.
With about 53 holdings, it effectively diversifies company-specific risk.
Alternatives
Global X U.S. Electrification ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ZAP is a good option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $7.22 billion in assets, Energy Select Sector SPDR ETF has $27.24 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)?
Designed to provide broad exposure to the Energy - Broad segment of the equity market, the Global X U.S. Electrification ETF (ZAP - Free Report) is a passively managed exchange traded fund launched on December 17, 2024.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $234.9 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.28%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 74.8% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Ametek Inc (AME) accounts for about 4.29% of total assets, followed by American Electric Power (AEP) and Quanta Services Inc (PWR).The top 10 holdings account for about 40.93% of total assets under management.
Performance and Risk
The ETF has gained about 23.87% so far this year.
With about 53 holdings, it effectively diversifies company-specific risk.
Alternatives
Global X U.S. Electrification ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ZAP is a good option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $7.22 billion in assets, Energy Select Sector SPDR ETF has $27.24 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.