Financials ETF XLF Unlocks Access to the Largest U.S. Financial Firms
Denver, CO
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June 22, 2023 09:28 PM Eastern Daylight Time
One of the attractive attributes of index investing is that a broad market or sector is not as reliant on picking a singular winner and avoiding a singular loser. Collectively, an index usually acts like a check-and-balance device for a basket of companies.
When it comes to the financial industry, discerning which bank or financial organization is better or worse than another is not an easy task for any kind of investor. That’s why an exchange-traded fund like the Financials Select Sector SPDR Fund (XLF) is such a key tool for advisors and investors.
XLF tracks an index of S&P 500 financial stocks, weighted by market cap, meaning the bigger the financial institution, the heavier the holding is in the ETF.
Being cap-market weighted, the ETF avoids more volatile small-caps. Many advisors, investors, and traders have made XLF a go-to security for financial exposure.
As part of the first Select Sector SPDR ETFs launched in 1998, XLF has ridden the peaks and valleys of the financial industry over the past 25 years. XLF has attracted over $30 billion in assets under management since inception, making it highly liquid and tradeable, and has an advisor- and investor-friendly expense ratio of 0.10%*.
Basket of Financial Giants
When it comes to Wall Street banks and financial institutions, XLF offers a slice of them all in one security. It is also important to understand not just the index methodology, but also knowing the companies under the hood.
The top 10 holdings** of XLF are: Berkshire Hathaway (13.26%), JP Morgan Chase (9.12%), Visa (8.23%), Mastercard (7.06%), Bank of America (4.45%), Wells Fargo (3.48%), S&P Global (2.77%), Goldman Sachs (2.51%), Morgan Stanley (2.45%), and BlackRock (2.26%).
As the oldest and largest financials ETF on the market, XLF remains a go-to proxy for the sector. It takes a broad approach, with a portfolio that spans all types of financial firms.
Notably, XLF is one of the most actively traded ETFs on the market today, routinely trading more than $1 billion worth of volume daily, reflecting how it can be a valuable trading tool.
Capturing the most important banks and financial institutions is made easy with this ETF, with its market-weighted holdings of 72 leading companies in American finance. This Financials Sector SPDR fund easily and cheaply fills the finance sleeve in a diversified portfolio.
DISCLAIMER: This is a work of research and should not be taken as investment or financial advice. Therefore, Select Sector SPDRs or the publisher is not liable for any decision made based on the publication.
About the Company:
Select Sector SPDR ETFs offer flexibility and customization opportunities. Many investors have similar outlooks, but no two are exactly alike. Select Sector SPDR ETFs let investors select the sectors that best meet their investment goals.
*Ordinary brokerage fees apply
**Holdings, Weightings & Assets as of 5/31/23 subject to change
DISCLOSURES
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Index figures do not reflect any fees, expenses or taxes. An investor should consider investment objectives, risks, fees and expenses before investing.
One may not invest directly in an index.
Transparent ETFs provide daily disclosure of portfolio holdings and weightings
All ETFs are subject to risk, including loss of principal. Sector ETF products are also subject to sector risk and nondiversification risk, which generally will result in greater price fluctuations than the overall market. Diversification does not eliminate risk.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust.
Media Contact:
Company: Select Sector SPDRs
Contact: Dan Dolan*
Address: 1290 Broadway, Suite 1000, Denver, CO 80203
Country: United States
Email: dan.dolan@sectorspdrs.com
Website: https://www.sectorspdrs.com/
*Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
SEL006657 EXP 9/30/23
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Dan Dolan
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