Including the popular XOP and XBI, all of SSgA’s industry ETFs are equal-weight funds, giving investors another advantage. [Getting Strategic With Equal-Weight ETFs]
“A lot of our industry funds outperform because they’re not concentrated and are less volatile,” said Mazza. “Depending upon on market environment, there are times when investors want to be cap-weighted, but there are times when equal-weighting is superior.”
Equal-weight is working this year for the SPDR S&P Transportation ETF (NYSEArca: XTN). Once overlooked compared to its main competitor, the iShares Transportation Average ETF (NYSEArca: IYT), XTN is benefiting from increased demand for oil transportation services. Indeed, that is a favorable catalyst for an ETF that allocates 36.5% of its weight to trucking stocks and 12.6% to railroad operators.
An almost 25% weight to airlines, one of the largest weights to that industry among all ETFs, has also helped XTN to a 19.4% year-to-date, which is slightly ahead of IYT. Investors are listening to the XTN story. The ETF now has almost $287 million in assets under management, nearly $185 million of which has come into the fund this year. [A Lift for Flying Transportation ETFs]
SPDR S&P Transportation ETF
Tom Lydon’s clients own shares of GLD and SPY.