Is State Street SPDR S&P Homebuilders ETF (XHB) a Strong ETF Right Now?

Core Viewpoint - The State Street SPDR S&P Homebuilders ETF (XHB) is a significant player in the Industrials ETFs category, with a focus on the homebuilding sector and a strategy aimed at matching the performance of the S&P Homebuilders Select Industry Index [1][5]. Fund Overview - Launched on January 31, 2006, XHB has accumulated over $1.65 billion in assets, making it one of the larger ETFs in its category [5]. - The fund is managed by State Street Investment Management and seeks to replicate the performance of the S&P Homebuilders Select Industry Index before fees and expenses [5][6]. Cost Structure - XHB has an annual operating expense ratio of 0.35%, positioning it as one of the least expensive options in the ETF space [7]. - The fund's 12-month trailing dividend yield is 0.77% [7]. Sector Exposure and Holdings - The ETF has a significant allocation in the Consumer Discretionary sector, comprising about 67% of the portfolio, followed by Industrials and Energy [8]. - Champion Homes Inc (SKY) is the largest holding at approximately 4.1% of total assets, with the top 10 holdings accounting for about 36.92% of total assets under management [9]. Performance Metrics - Year-to-date, XHB has increased by roughly 0.34%, with the same percentage gain over the last 12 months as of December 31, 2025 [10]. - The fund has traded between $86.79 and $119.58 in the past 52 weeks, indicating a range of volatility [10]. - XHB has a beta of 1.31 and a standard deviation of 25.22% over the trailing three-year period, categorizing it as a high-risk investment [10]. Alternatives - For investors seeking to outperform the Industrials ETFs segment, alternatives such as the Invesco Building & Construction ETF (PKB) are available, which tracks the Dynamic Building & Construction Intellidex Index and has $285.28 million in assets with an expense ratio of 0.57% [11]. - Traditional market cap weighted ETFs may offer cheaper and lower-risk options for those looking to match the returns of the Industrials ETFs [12].