We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
Read MoreHide Full Article
A smart beta exchange traded fund, the US Treasury 6 Month Bill ETF (XBIL - Free Report) debuted on 03/07/2023, and offers broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $603.22 million, this makes it one of the average sized ETFs in the Government Bond ETFs. XBIL is managed by Us Benchmark Series. Before fees and expenses, this particular fund 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
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 0.15%, making it on par with most peer products in the space.
XBIL's 12-month trailing dividend yield is 5.22%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
The ETF has added roughly 3.72% and is up about 5.35% so far this year and in the past one year (as of 09/18/2024), respectively. XBIL has traded between $49.89 and $50.18 during this last 52-week period.
XBIL has a beta of 0 and standard deviation of 0.41% 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.
IShares 0-3 Month Treasury Bond ETF (SGOV - Free Report) tracks ICE 0-3 MONTH US TREASURY SECURITIES IND and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. IShares 0-3 Month Treasury Bond ETF has $25.70 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $34.82 billion. SGOV has an expense ratio of 0.09% 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is US Treasury 6 Month Bill ETF (XBIL) a Strong ETF Right Now?
A smart beta exchange traded fund, the US Treasury 6 Month Bill ETF (XBIL - Free Report) debuted on 03/07/2023, and offers broad exposure to the Government Bond ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $603.22 million, this makes it one of the average sized ETFs in the Government Bond ETFs. XBIL is managed by Us Benchmark Series. Before fees and expenses, this particular fund 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
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 0.15%, making it on par with most peer products in the space.
XBIL's 12-month trailing dividend yield is 5.22%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
XBIL's top 10 holdings account for about 100% of its total assets under management.
Performance and Risk
The ETF has added roughly 3.72% and is up about 5.35% so far this year and in the past one year (as of 09/18/2024), respectively. XBIL has traded between $49.89 and $50.18 during this last 52-week period.
XBIL has a beta of 0 and standard deviation of 0.41% 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.
IShares 0-3 Month Treasury Bond ETF (SGOV - Free Report) tracks ICE 0-3 MONTH US TREASURY SECURITIES IND and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) tracks Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. IShares 0-3 Month Treasury Bond ETF has $25.70 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $34.82 billion. SGOV has an expense ratio of 0.09% 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.