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Should You Invest in the SPDR S&P Transportation ETF (XTN)?

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·3 min read
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Looking for broad exposure to the Industrials - Transportation/Shipping segment of the equity market? You should consider the SPDR S&P Transportation ETF (XTN), a passively managed exchange traded fund launched on 01/26/2011.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 2, placing it in top 13%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed assets over $767.91 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 0.61%.

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.

Looking at individual holdings, Genco Shipping & Trading Ltd (GNK) accounts for about 3% of total assets, followed by Matson Inc. (MATX) and Eagle Bulk Shipping Inc (EGLE).

The top 10 holdings account for about 25.52% of total assets under management.

Performance and Risk

Year-to-date, the SPDR S&P Transportation ETF has lost about -13.47% so far, and is down about -7.45% over the last 12 months (as of 05/03/2022). XTN has traded between $79.02 and $98.74 in this past 52-week period.

The ETF has a beta of 1.27 and standard deviation of 30.61% for the trailing three-year period, making it a high risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

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 excellent 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 $1.17 billion in assets, U.S. Global Jets ETF has $3.45 billion. IYT has an expense ratio of 0.41% 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
 
Genco Shipping & Trading Limited (GNK) : Free Stock Analysis Report
 
Matson, Inc. (MATX) : Free Stock Analysis Report
 
Eagle Bulk Shipping Inc. (EGLE) : 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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Zacks Investment Research

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