ETF Spotlight: Software & Services | ETF Trends

ETF Spotlight on the SPDR S&P Software & Services ETF (NYSEArca: XSW), part of an ongoing series.

Assets: $27.9 million

Objective: The SPDR S&P Software & Services fund tries to reflect the performance of the S&P Software & Services Select Industry Index, which represents the software sub-sector taken from the S&P Total Stock Market Index and equally weights its holdings.

Holdings: Top holdings include Sapient Corporation (NasdaqGS: SAPE) 0.9%, Digital River (NasdaqGS: DRIV) 0.9%, Qualys (NasdaqGS: QLYS) 0.8%, (NasdaqGS: STMP) 0.8% and Callidus Software (NasdaqGS: CALD) 0.8%.

What You Should Know:

  • State Street Global Advisors sponsors the fund.
  • XSW has a 0.35% expense ratio.
  • The ETF has 178 holdings and the top ten components make up 7.7% of the overall portfolio.
  • Sub-sector allocations include application software 28.9%, internet software & services 25.6%, data processing & outsourced services 21.7%, systems software 10.8%, IT consulting 10.3% and home entertainment software 2.6%.
  • The fund is up 11.9% over the past month, up 8.2% over the past three months and up 2.9% year-to-date.
  • XSW is trading 7.7% above its 200-day exponential moving average.
  • Due to its equal weighting methodology, the ETF leans toward smaller company stocks.
  • Market capitalization exposure include mega-caps 3.7%, large-caps 9.3%, mid-caps 29.3%, small-caps 33.2% and micro-caps 24.5%.
  • The ETF is still relatively small, so potential investors should utilize limit orders to better control trades.

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