Should You Invest in the SPDR S&P Transportation ETF (XTN)?
Sector ETF report for XTN
If you're interested in broad exposure to the Industrials - Transportation/Shipping segment of the equity market, look no further than the SPDR S&P Transportation ETF (XTN), a passively managed exchange traded fund launched on 01/26/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $719.58 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. XTN seeks to match the performance of the S&P Transportation Select Industry Index before fees and expenses.
This Index is one of nineteen S&P Select Industry Indices, each designed to measure the performance of a narrow sub-industry or group of sub-industries as defined by the GICS. Companies in the Select Industry Indices are classified based primarily on revenues; however, earnings and market perception are also considered. The Transportation Index is a modified equal weight index.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.17%.
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.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Lyft Inc. Class A (LYFT) accounts for about 2.81% of total assets, followed by Amerco (UHAL) and United Parcel Service Inc. Class B (UPS).
The top 10 holdings account for about 26.10% of total assets under management.
Performance and Risk
The ETF has added roughly 29.87% and was up about 51.34% so far this year and in the past one year (as of 10/28/2021), respectively. XTN has traded between $58.57 and $91.80 during this last 52-week period.
The ETF has a beta of 1.34 and standard deviation of 29.75% for the trailing three-year period, making it a high risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.
SPDR S&P Transportation ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XTN is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Transportation ETF (IYT) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $1.79 billion in assets, U.S. Global Jets ETF has $3.42 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%.
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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SPDR S&P Transportation ETF (XTN): ETF Research Reports
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
Amerco (UHAL): Get Free Report
iShares U.S. Transportation ETF (IYT): ETF Research Reports
U.S. Global Jets ETF (JETS): ETF Research Reports
Lyft, Inc. (LYFT): Free Stock Analysis Report
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