Launched on 01/26/2011, the SPDR S&P Transportation ETF (XTN) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Transportation/Shipping segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 10, placing it in bottom 38%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $268.48 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.
The S&P Transportation Select Industry Index represents the transportation segment of the S&P Total Market Index.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.75%.
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, United Airlines Holdings Inc (UAL) accounts for about 3.84% of total assets, followed by Skywest Inc (SKYW) and Delta Air Lines Inc (DAL).
The top 10 holdings account for about 30.84% of total assets under management.
Performance and Risk
The ETF has gained about 11.30% and is up roughly 26.19% so far this year and in the past one year (as of 11/25/2024), respectively. XTN has traded between $73.55 and $93.55 during this last 52-week period.
The ETF has a beta of 1.32 and standard deviation of 25.61% 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.
Alternatives
SPDR S&P Transportation ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XTN is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $770.91 million in assets, U.S. Global Jets ETF has $1.06 billion. IYT has an expense ratio of 0.39% and JETS charges 0.60%.
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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SPDR S&P Transportation ETF (XTN): ETF Research Reports
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
iShares U.S. Transportation ETF (IYT): ETF Research Reports
U.S. Global Jets ETF (JETS): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
