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Should you invest in the SPDR S&P Transportation ETF (XTN)?

If you are 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 commodity funds, offering many ways to gain low-risk, diversified exposure to a large group of companies in particular sectors. Industrial Products – Transportation / Shipping is one of the 16 major Zacks sectors within the Zacks Industrial Classification. He is currently ranked 5, placing him in the top 31%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed over $ 719.58 million in assets, making it one of the mid-sized ETFs attempting to match the performance of the Industry – Transportation / Shipping segment of the stock 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-sector or group of sub-sectors as defined by the GICS. The companies appearing in the Select Industry indices are classified mainly according to their income; however, benefits and market perception are also taken into account. The transport index is a modified equal weight index.

Costs

When considering the total return of an ETF, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long run if all other factors remain equal.

This ETF’s annual operating expenses are 0.35%, making it one of the cheapest products in the space.

It has a 12-month dividend yield of 1.17%.

Sector exposure and main stocks

Even though ETFs offer diversified exposure that minimizes the risk associated with individual stocks, investors should also look at the actual holdings within the fund. Fortunately, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has the highest allocation in the industrials sector, around 100% of the portfolio.

In terms of individual holdings, Lyft Inc. Class A (LYFT) accounts for approximately 2.81% of total assets, followed by Amerco (UHAL) and United Parcel Service Inc. Class B (UPS).

The top 10 holdings represent approximately 26.10% of total assets under management.

Return and risk

The ETF added around 29.87% and was up around 51.34% so far this year and over the last year (as of 10/28/2021), respectively. XTN traded between $ 58.57 and $ 91.80 in that last 52 week period.

The ETF has a beta of 1.34 and a standard deviation of 29.75% for the three-year period, making it a high-risk choice in the space. With around 46 positions, he has more concentrated exposure than his peers.

Alternatives

The SPDR S&P Transportation ETF holds a Zacks ETF ranking of 2 (buy), which is based on the expected return of the asset class, expense ratio and momentum, among other factors. For this reason, XTN is an exceptional option for investors seeking exposure to the industrial ETF segment of the market. There are other additional ETFs in the space that investors might consider as well.

The IShares US Transportation ETF (IYT) tracks the Dow Jones Transportation Average and the US Global Jets ETF (JETS) tracks the US Global Jets index. IShares US Transportation ETF has $ 1.79 billion in assets, US Global Jets ETF has $ 3.42 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%.

Final result

To learn more about this and other ETFs, search for products that match your investment goals, and read articles on the latest developments in the ETF investing world, please visit the 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): Free Stock Analysis Report

IShares US Transportation ETF (IYT): ETF Research Reports

ETF US Global Jets (JETS): ETF Research Reports

Lyft, Inc. (LYFT): Free Stock Analysis Report

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