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Is SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
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Designed to provide broad exposure to the Industrials ETFs category of the market, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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
XTN is managed by State Street Global Advisors, and this fund has amassed over $206.63 million, which makes it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P Transportation Select Industry Index.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, C.h. Robinson Worldwide Inc (CHRW - Free Report) accounts for about 3.29% of the fund's total assets, followed by Fedex Corp (FDX - Free Report) and Norfolk Southern Corp (NSC - Free Report) .
Its top 10 holdings account for approximately 30.48% of XTN's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Transportation ETF has lost about -4.13% so far, and is up about 5.53% over the last 12 months (as of 09/23/2024). XTN has traded between $66.94 and $84.94 in this past 52-week period.
XTN has a beta of 1.32 and standard deviation of 25.37% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Transportation ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $604.71 million in assets, U.S. Global Jets ETF has $1.09 billion. IYT has an expense ratio of 0.40% and JETS charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 SPDR S&P Transportation ETF (XTN) a Strong ETF Right Now?
Designed to provide broad exposure to the Industrials ETFs category of the market, the SPDR S&P Transportation ETF (XTN - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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
XTN is managed by State Street Global Advisors, and this fund has amassed over $206.63 million, which makes it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P Transportation Select Industry Index.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, C.h. Robinson Worldwide Inc (CHRW - Free Report) accounts for about 3.29% of the fund's total assets, followed by Fedex Corp (FDX - Free Report) and Norfolk Southern Corp (NSC - Free Report) .
Its top 10 holdings account for approximately 30.48% of XTN's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Transportation ETF has lost about -4.13% so far, and is up about 5.53% over the last 12 months (as of 09/23/2024). XTN has traded between $66.94 and $84.94 in this past 52-week period.
XTN has a beta of 1.32 and standard deviation of 25.37% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Transportation ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares U.S. Transportation ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $604.71 million in assets, U.S. Global Jets ETF has $1.09 billion. IYT has an expense ratio of 0.40% and JETS charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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.