Is SPDR NYSE Technology ETF (XNTK) a Strong ETF Right Now?

The SPDR NYSE Technology ETF (XNTK) made its debut on 09/25/2000, and is a smart beta exchange traded fund that provides broad exposure to the Technology ETFs category of the market.

What Are Smart Beta ETFs?

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

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by State Street Global Advisors, and has been able to amass over $422.03 million, which makes it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, XNTK seeks to match the performance of the NYSE Technology Index.

The NYSE Technology Index is composed of 35 leading US-listed technology-related companies.

Cost & Other Expenses

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

Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.

The fund has a 12-month trailing dividend yield of 0.47%.

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 Information Technology sector – about 68.10% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at 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).

The top 10 holdings account for about 33.89% of total assets under management.

Performance and Risk

Year-to-date, the SPDR NYSE Technology ETF has lost about -35.05% so far, and is down about -24.71% over the last 12 months (as of 05/23/2022). XNTK has traded between $107.46 and $175.28 in this past 52-week period.

The fund has a beta of 1.19 and standard deviation of 31.86% for the trailing three-year period. With about 36 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

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

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.

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 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

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