Looking for broad exposure to the Industrials - Engineering and Construction segment of the equity market? You should consider the SPDR S&P Homebuilders ETF (XHB Quick QuoteXHB - Free Report) , a passively managed exchange traded fund launched on January 31, 2006.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

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 13, placing it in bottom 19%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $1.85 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 US 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

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 0.73%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 69% of the portfolio, followed by Industrials.

Looking at individual holdings, Installed Building Products (IBP) accounts for about 4.4% of total assets, followed by Dr Horton Inc (DHI) and Topbuild Corp (BLD).

The top 10 holdings account for about 37.38% of total assets under management.

Performance and Risk

Year-to-date, the SPDR S&P Homebuilders ETF has added about 6.15% so far, and is down about 8.63% over the last 12 months (as of 10/22/2025). XHB has traded between $86.79 and $125.16 in this past 52-week period.

The ETF has a beta of 1.29 and standard deviation of 26.08% for the trailing three-year period, making it a high risk choice in the space. With about 36 holdings, it has more concentrated exposure than peers.

Alternatives

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 a suitable option for investors seeking exposure to the Industrials ETFs segment of the market. Instead, there are better ETFs in the space to consider.

Invesco Building & Construction ETF (PKB) tracks Dynamic Building & Construction Intellidex Index. The fund has $300.91 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.