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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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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
Managed by Us Benchmark Series, XBIL has amassed assets over $636.58 million, making it one of the average sized ETFs in the Government Bond ETFs. XBIL 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
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.
Operating expenses on an annual basis are 0.15% for XBIL, making it on par with most peer products in the space.
XBIL's 12-month trailing dividend yield is 5.06%.
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
The ETF return is roughly 4.42% so far this year and is up about 5.16% in the last one year (as of 11/18/2024). In the past 52-week period, it has traded between $49.89 and $50.21.
The fund has a beta of 0.01 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 $27.30 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $34.31 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.
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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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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
Managed by Us Benchmark Series, XBIL has amassed assets over $636.58 million, making it one of the average sized ETFs in the Government Bond ETFs. XBIL 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
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.
Operating expenses on an annual basis are 0.15% for XBIL, making it on par with most peer products in the space.
XBIL's 12-month trailing dividend yield is 5.06%.
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
The ETF return is roughly 4.42% so far this year and is up about 5.16% in the last one year (as of 11/18/2024). In the past 52-week period, it has traded between $49.89 and $50.21.
The fund has a beta of 0.01 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 $27.30 billion in assets, SPDR Bloomberg 1-3 Month T-Bill ETF has $34.31 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.