Designed to provide broad exposure to the Industrials - Transportation/Shipping segment of the equity market, the SPDR S&P Transportation ETF (XTN) is a passively managed exchange traded fund launched on 01/26/2011.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 4, placing it in top 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $508.51 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.90%.
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
The ETF has lost about -27.37% so far this year and is down about -19.81% in the last one year (as of 07/04/2022). In that past 52-week period, it has traded between $66.98 and $98.74.
The ETF has a beta of 1.29 and standard deviation of 31.59% 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.