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Should You Invest in the iShares U.S. Financials ETF (IYF)?
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Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the iShares U.S. Financials ETF (IYF - Free Report) , a passively managed exchange traded fund launched on 05/22/2000.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.09 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYF seeks to match the performance of the Dow Jones U.S. Financials Index before fees and expenses.
The Russell 1000 Financials 40 Act 15/22.5 Daily Capped Index measures the performance of the financial 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 on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 99.60% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 13.43% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Bank Of America Corp (BAC - Free Report) .
The top 10 holdings account for about 42.37% of total assets under management.
Performance and Risk
So far this year, IYF has added roughly 5.26%, and is down about -10.33% in the last one year (as of 01/18/2023). During this past 52-week period, the fund has traded between $67.55 and $90.30.
The ETF has a beta of 1.03 and standard deviation of 29.86% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYF is an excellent option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Financials ETF (VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.21 billion in assets, Financial Select Sector SPDR ETF has $33.40 billion. VFH has an expense ratio of 0.10% and XLF charges 0.10%.
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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Should You Invest in the iShares U.S. Financials ETF (IYF)?
Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the iShares U.S. Financials ETF (IYF - Free Report) , a passively managed exchange traded fund launched on 05/22/2000.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.09 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYF seeks to match the performance of the Dow Jones U.S. Financials Index before fees and expenses.
The Russell 1000 Financials 40 Act 15/22.5 Daily Capped Index measures the performance of the financial 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 on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 99.60% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 13.43% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Bank Of America Corp (BAC - Free Report) .
The top 10 holdings account for about 42.37% of total assets under management.
Performance and Risk
So far this year, IYF has added roughly 5.26%, and is down about -10.33% in the last one year (as of 01/18/2023). During this past 52-week period, the fund has traded between $67.55 and $90.30.
The ETF has a beta of 1.03 and standard deviation of 29.86% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYF is an excellent option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Financials ETF (VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.21 billion in assets, Financial Select Sector SPDR ETF has $33.40 billion. VFH has an expense ratio of 0.10% and XLF charges 0.10%.
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.