Is the SPDR NYSE Technology ETF (XNTK) a strong ETF now?

SPDR NYSE Technology ETF (XNTK) debuted on 09/25/2000, and Technology is a smart beta-exchange fund that offers extensive exposure to the market-leading ETF category.

What are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on weighted market capitalization indices that are designed to represent a particular market or market segment.

Investors who believe in market efficiency should consider market cap indices as they repeat market returns in a low, comfortable and transparent manner.

If you’re the type of investor who wants to get past the market through good stock selection, smart beta funds are your best bet; this fund class is known for tracking non-cap weighted strategies.

This type of index follows the same mindset as it tries to select stocks with better risk performance options; Capless strategies are based on selection, or a combination of these characteristics.

Smart Beta Space offers investors many different options, from the same weighting, to one of the simplest strategies, the more complicated one being basic and volatility / moment-based weighting. However, not all of these methodologies have yielded significant results.

Fund sponsor and index

The fund is managed by State Street Global Advisors, which has raised more than $ 422.03 million, making it one of the medium-sized ETFs for technology ETFs. Prior to fees and expenses, XNTK seeks to match the performance of the NYSE Technology Index.

The NYSE Technology Index is made up of 35 major U.S.-listed technology-related companies.

Cost and other expenses

Cost is an important factor in choosing the right ETF, and cheaper funds can significantly outperform their most expensive cousins ​​if all other bases are the same.

The annual operating costs of this ETF are 0.35%, making it one of the most expensive products.

The fund has a dividend yield of 0.47% for 12 months.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure that minimizes the risk of a single share, investors should also consider the actual holdings of the fund. Fortunately, most ETFs are highly transparent products that make their holdings known on a daily basis.

This ETF has the highest allocation in the information technology sector – about 68.10% of the portfolio. Discretionary Consumption and Telecom round out the top three.

In terms of individual holdings, Micron Technology Inc. (MU) accounts for about 3.74% of total assets, followed by International Business Machines Corporation (IBM) and Intel Corporation (INTC).

They account for about 33.89% of the total assets managed by the 10 main farms.

Performance and Risk

To date, the SPDR NYSE Technology ETF has lost about -35.05% so far, and has fallen by about -24.71% in the last 12 months (as of May 23, 2022). XNTK has been trading between $ 107.46 and $ 175.28 over the last 52 weeks.

The fund has a beta of 1.19 and a standard deviation of 31.86% over the last three years. With around 36 farms, it has a more concentrated exposure than its peers.

Alternatives

SPDR NYSE Technology ETF is a great option for investors who want to cross the Technology ETF segment of the market. There are other ETFs that investors can consider.

Technology Select Sector SPDR ETF (XLK) The Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) track the MSCI US Investable Market Information Technology Index 25/50. The Technology Select Sector SPDR ETF has $ 39.13 billion in assets, while the Vanguard Information Technology ETF has $ 41.42 billion. XLK charges 0.10% and VGT charges 0.10%.

Investors looking for cheaper options and lower risk should consider traditional market caps that aim to match the benefits of technology ETFs.

Bottom line

To learn more about this product and other ETFs, search for products that match your investment goals, and read articles on the latest developments in the ETF investment universe, visit the Zacks ETF Center.

Want the latest Zacks Investment Research recommendations? Today, you can download the 7 best shares for the next 30 days. Click here for this free report

SPDR NYSE Technology ETF (XNTK): ETF Research Reports

Intel Corporation (INTC): Free Stock Analysis Report

International Business Machines Corporation (IBM): Free Stock Analysis Report

Micron Technology, Inc. (MU): Free Stock Analysis Report

Technology Select Sector SPDR ETF (XLK): ETF Research Reports

Vanguard Information Technology ETF (VGT): ETF Research Reports

Click here to read this article on Zacks.com.

Zacks Investment Research

Leave a Comment