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Should You Invest in the SPDR S&P Software & Services ETF (XSW)?
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The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $231.09 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
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 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.08%.
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 Information Technology sector--about 97.40% of the portfolio.
Looking at individual holdings, A10 Networks Inc. (ATEN - Free Report) accounts for about 0.81% of total assets, followed by Yext Inc. (YEXT - Free Report) and Fair Isaac Corporation (FICO - Free Report) .
The top 10 holdings account for about 7.63% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Software & Services ETF has added about 13.67% so far, and is down about -12.04% over the last 12 months (as of 03/06/2023). XSW has traded between $102 and $152.30 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 33.95% for the trailing three-year period, making it a high risk choice in the space. With about 198 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 Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $185.67 million in assets, iShares Expanded Tech-Software Sector ETF has $4.89 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.40%.
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)?
The SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Software segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $231.09 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
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 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.08%.
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 Information Technology sector--about 97.40% of the portfolio.
Looking at individual holdings, A10 Networks Inc. (ATEN - Free Report) accounts for about 0.81% of total assets, followed by Yext Inc. (YEXT - Free Report) and Fair Isaac Corporation (FICO - Free Report) .
The top 10 holdings account for about 7.63% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Software & Services ETF has added about 13.67% so far, and is down about -12.04% over the last 12 months (as of 03/06/2023). XSW has traded between $102 and $152.30 in this past 52-week period.
The ETF has a beta of 1.13 and standard deviation of 33.95% for the trailing three-year period, making it a high risk choice in the space. With about 198 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 Dynamic Software ETF tracks Dynamic Software Intellidex Index and the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) tracks S&P North American Technology-Software Index. Invesco Dynamic Software ETF has $185.67 million in assets, iShares Expanded Tech-Software Sector ETF has $4.89 billion. PSJ has an expense ratio of 0.56% and IGV charges 0.40%.
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.