U.S. Markets open in 9 hrs 22 mins

How To Know What’s In Your ETF

Cinthia Murphy

One of the benefits of investing in ETFs is portfolio transparency. As an investor, it’s easy to know what you own in an ETF.

At ETF.com, we tackle portfolio holding transparency from two different angles—both of them freely available to anyone using our website. The first is through our individual fund pages where you can see what securities are in an ETF you own, as you can see here with the largest ETF in the world in terms of assets, the SPDR S&P 500 ETF Trust (SPY).

The second is through our ETF Stock Finder tool, where you can see what ETFs own a specific security, such as Tesla.

Here’s a quick run-down of how to go about using our resources.

Good First Step: Fund Pages

If you own, say, the iShares Core S&P 500 ETF (IVV), and you want to know what stocks are in that portfolio, and just how much exposure you’ll be getting to these stocks in the overall mix, check out IVV’s fund page: www.etf.com/IVV.

There’s lots of data in our fund pages relating to all aspects of the ETF itself, and portfolio construction is right at the top. As the IVV tables below reflect, Microsoft, Apple, Amazon and Facebook are your biggest allocations, and technology leads your sector exposure. The composition of the entire basket is right at your fingertips.

 

 

This type of under-the-hood portfolio information is available for all 2,200-plus ETFs on the market today, using the same URL format: etf.com/TICKER

Now, say, you read today’s MarketWatch article on the most beaten-down stocks of the year. According to the piece, 14 stocks in the S&P 500 are down at least 50% from their 52-week highs, a noteworthy performance if you consider the S&P 500 is up double digits year to date.

There are all sorts of stocks on that list. Biotech firm Nektar Therapeutics (NKTR) leads the group, with losses of 63% from its highs. Telecom company CenturyLink (CTL) is down 58%. Oil firm Halliburton (HAL) is down 56%, and so on. (You can see the whole list here.)

You might find yourself wanting to avoid these stocks entirely, or you might be a big believer in bargain hunting, and you want to buy into these beaten-down names looking for a rebound. Either way, if you are an ETF investor, you can find what ETFs own these stocks in our stock finder tool.

For example, look at Nektar. Once you are in the tool (ETF Stock Finder), your first step is to enter the ticker for the company, NKTR, into the search box, as seen below.

 

 

You will find that 112 different ETFs currently own Nektar, a list that’s completely detailed at the bottom of the page.

You will also find that the biggest allocation to Nektar within an ETF portfolio is in the SPDR S&P Pharmaceuticals ETF (XPH), where Nektar represents about 4.5% of the portfolio. XPH owns 42 securities in all.

Another interesting data point here is that the biggest holder of Nektar stock in terms of share volume is the First Trust NYSE Arca Biotechnology Index Fund (FBT), with about 3 million shares; nearly $100 million worth of Nektar sits in this portfolio. (XPH’s allocation, for instance, represents only about $10 million worth of Nektar shares.)

But as a single holding, Nektar represents only about 3.6% of FBT’s overall 29-holding portfolio, so FBT’s allocation weighting to Nektar is smaller than XPH’s.

 

 

You can also find insight into what types of ETFs tend to hold Nektar, as well as which ETF is currently delivering the best performance while allocated to this company. In this case, it’s the Invesco Russell MidCap Pure Growth ETF (PXMG), which is up some 24% year to date.

PXMG’s performance is stellar, but Nektar itself has had little do with it. PXMG only allocates about 0.13% of its portfolio to the company. In other words, you can access Nektar here, but not very much of it.

 

Chart courtesy of StockCharts.com

 

The table listing all the 112 ETFs currently holding Nektar places each ETF in its respective market segment, making the job of comparing, say, two biotech strategies investing in Nektar, easy to do.

All of this data is easy to navigate in an interface that’s frills-free and self-explanatory. And you could do this same exercise for all 14 beaten-down stocks listed in the MarketWatch article—or for any stock.

We see our role of helping you choose the right ETF for your goals as paramount. Due diligence in an ETF market that boasts 2,200-plus choices is crucial, and it’s something we hope these free-to-use resources and tools we offer can help you achieve.

Contact Cinthia Murphy at cmurphy@etf.com

Recommended Stories


Permalink | © Copyright 2019 ETF.com. All rights reserved