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Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
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Launched on 03/07/2023, the US Treasury 6 Month Bill ETF (XBIL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Us Benchmark Series. XBIL has been able to amass assets over $626.31 million, making it one of the average sized ETFs in the Government Bond ETFs. This particular fund seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 5.27%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
So far this year, XBIL has added roughly 2.70%, and was up about 5.20% in the last one year (as of 07/19/2024). During this past 52-week period, the fund has traded between $49.89 and $50.18.
The fund has a beta of 0 and standard deviation of 0.39% for the trailing three-year 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) 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 $24.51 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $33.21 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?
Launched on 03/07/2023, the US Treasury 6 Month Bill ETF (XBIL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Us Benchmark Series. XBIL has been able to amass assets over $626.31 million, making it one of the average sized ETFs in the Government Bond ETFs. This particular fund seeks to match the performance of the ICE BOFA US 6-MONTH TREASURY BILL INDEX before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 5.27%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
So far this year, XBIL has added roughly 2.70%, and was up about 5.20% in the last one year (as of 07/19/2024). During this past 52-week period, the fund has traded between $49.89 and $50.18.
The fund has a beta of 0 and standard deviation of 0.39% for the trailing three-year 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) 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 $24.51 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $33.21 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.