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Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
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The US Treasury 6 Month Bill ETF (XBIL - Free Report) was launched on 03/07/2023, and is a smart beta exchange traded fund designed to offer broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Us Benchmark Series. XBIL has been able to amass assets over $492.28 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, XBIL seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX .
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things 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 2.95%.
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.
Its top 10 holdings account for approximately 100% of XBIL's total assets under management.
Performance and Risk
Year-to-date, the US Treasury 6 Month Bill ETF return is roughly 2.96% so far. XBIL has traded between $49.93 and $50.26 in this past 52-week 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.
JPMorgan Ultra-Short Income ETF (JPST - Free Report) tracks N/A and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. JPMorgan Ultra-Short Income ETF has $23.08 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $35.54 billion. JPST has an expense ratio of 0.18% 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?
The US Treasury 6 Month Bill ETF (XBIL - Free Report) was launched on 03/07/2023, and is a smart beta exchange traded fund designed to offer broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Us Benchmark Series. XBIL has been able to amass assets over $492.28 million, making it one of the average sized ETFs in the Government Bond ETFs. Before fees and expenses, XBIL seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX .
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things 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 2.95%.
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.
Its top 10 holdings account for approximately 100% of XBIL's total assets under management.
Performance and Risk
Year-to-date, the US Treasury 6 Month Bill ETF return is roughly 2.96% so far. XBIL has traded between $49.93 and $50.26 in this past 52-week 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.
JPMorgan Ultra-Short Income ETF (JPST - Free Report) tracks N/A and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. JPMorgan Ultra-Short Income ETF has $23.08 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $35.54 billion. JPST has an expense ratio of 0.18% 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.