Should You Invest in the SPDR NYSE Technology ETF (XNTK)?

The SPDR NYSE Technology ETF (XNTK) was launched on 09/25/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - 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.

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. Technology - 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 State Street Global Advisors. It has amassed assets over $783.43 million, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. XNTK seeks to match the performance of the NYSE Technology Index before fees and expenses.

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

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.33%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 67.30% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 4.86% of total assets, followed by Micron Technology Inc (MU) and Meta Platforms Inc Class A (META).

The top 10 holdings account for about 36.12% of total assets under management.

Performance and Risk

The ETF has gained about 10.96% and is up roughly 40.13% so far this year and in the past one year (as of 06/03/2024), respectively. XNTK has traded between $129.70 and $187.87 during this last 52-week period.

The ETF has a beta of 1.24 and standard deviation of 28.01% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR NYSE Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XNTK is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that 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 $65.26 billion in assets, Vanguard Information Technology ETF has $67.58 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.

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

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

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

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

Vanguard Information Technology ETF (VGT): ETF Research Reports

Meta Platforms, Inc. (META) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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