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Should You Invest in the SPDR S&P Transportation ETF (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.

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.

Investor-friendly, sector ETFs provide many options 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 4, placing it in top 25%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed assets over $926.86 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

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 1.12%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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, Avis Budget Group Inc. (CAR) accounts for about 4.05% of total assets, followed by Arcbest Corporation (ARCB) and Saia Inc. (SAIA).

The top 10 holdings account for about 26.53% of total assets under management.

Performance and Risk

So far this year, XTN has lost about -9.44%, and it's up approximately 4.67% in the last one year (as of 03/02/2022). During this past 52-week period, the fund has traded between $79.02 and $98.74.

The ETF has a beta of 1.30 and standard deviation of 29.88% for the trailing three-year period, making it a high risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.

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 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 $1.56 billion in assets, U.S. Global Jets ETF has $3.57 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
 
Avis Budget Group, Inc. (CAR): Free Stock Analysis Report
 
iShares U.S. Transportation ETF (IYT): ETF Research Reports
 
ArcBest Corporation (ARCB): Free Stock Analysis Report
 
Saia, Inc. (SAIA): Free Stock Analysis Report
 
U.S. Global Jets ETF (JETS): ETF Research Reports
 
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