The iShares U.S. Home Construction ETF (ITB) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.46 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. ITB seeks to match the performance of the Dow Jones U.S. Select Home Construction Index before fees and expenses.
The Dow Jones U.S. Select Home Builders Index is a subset of the Dow Jones U.S. Household Goods Index. It is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.51%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 75.20% of the portfolio. Industrials and Materials round out the top three.
Looking at individual holdings, D R Horton Inc (DHI) accounts for about 13.52% of total assets, followed by Lennar A Corp Class A (LEN) and Nvr Inc (NVR).
The top 10 holdings account for about 64.87% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Home Construction ETF has lost about -5.92% so far, and is down about -11.84% over the last 12 months (as of 04/03/2025). ITB has traded between $93.86 and $129.34 in this past 52-week period.
The ETF has a beta of 1.44 and standard deviation of 28.69% for the trailing three-year period, making it a high risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Home Construction ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. ITB, then, is not the best option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. However, there are better ETFs in the space to consider.
Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.85 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $20.46 billion. VCR has an expense ratio of 0.09% and XLY charges 0.08%.
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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iShares U.S. Home Construction ETF (ITB): ETF Research Reports Lennar Corporation (LEN): Free Stock Analysis Report D.R. Horton, Inc. (DHI): Free Stock Analysis Report NVR, Inc. (NVR): Free Stock Analysis Report Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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