The iShares U.S. Home Construction ETF (ITB) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.72 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. ITB seeks to match the performance of the Dow Jones U.S. Select Home Construction Index before fees and expenses.
The Dow Jones U.S. Select Home Builders Index is a subset of the Dow Jones U.S. Household Goods Index. It is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the U.S. equity market.
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 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.39%.
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 Consumer Discretionary sector--about 78.20% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, D R Horton Inc (DHI) accounts for about 15.83% of total assets, followed by Lennar A Corp (LEN) and Nvr Inc (NVR).
The top 10 holdings account for about 68.28% of total assets under management.
Performance and Risk
The ETF return is roughly 24.60% and was up about 61.01% so far this year and in the past one year (as of 09/25/2024), respectively. ITB has traded between $71.40 and $128.58 during this last 52-week period.
The ETF has a beta of 1.51 and standard deviation of 29.84% for the trailing three-year period, making it a high risk choice in the space. With about 48 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Home Construction ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ITB is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.89 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.42 billion. VCR has an expense ratio of 0.10% and XLY charges 0.09%.
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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Get it free >>iShares U.S. Home Construction ETF (ITB): ETF Research Reports
Lennar Corporation (LEN) : Free Stock Analysis Report
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
NVR, Inc. (NVR) : Free Stock Analysis Report
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
