The State Street SPDR S&P Homebuilders ETF (XHB) was launched on January 31, 2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Engineering and Construction segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Engineering and Construction is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $1.59 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Engineering and Construction segment of the equity market. XHB seeks to match the performance of the S&P Homebuilders Select Industry Index before fees and expenses.
The S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders Index is a modified equal weight index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.65%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 64.7% of the portfolio, followed by Industrials.
Looking at individual holdings, Johnson Controls Internation (JCI) accounts for about 3.9% of total assets, followed by Carrier Global Corp (CARR) and Trane Technologies Plc (TT).The top 10 holdings account for about 35.86% of total assets under management.
Performance and Risk
The ETF has added roughly 5.49% and it's up approximately 16.54% so far this year and in the past one year (as of 04/28/2026), respectively. XHB has traded between $93.07 and $121.36 during this last 52-week period.
The ETF has a beta of 1.35 and standard deviation of 25.79% for the trailing three-year period, making it a high risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
State Street SPDR S&P Homebuilders ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XHB, then, is not the best option for investors seeking exposure to the Industrials ETFs segment of the market. However, there are better ETFs in the space to consider.
Invesco Building & Construction ETF (PKB) tracks Dynamic Building & Construction Intellidex Index. The fund has $450.94 million in assets. PKB has an expense ratio of 0.57%.
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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State Street SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).