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Should You Invest in the iShares U.S. Financials ETF (IYF)?
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The iShares U.S. Financials ETF (IYF - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.29 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.64%.
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 Financials sector--about 99% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 12.44% 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 45.13% of total assets under management.
Performance and Risk
The ETF has added roughly 2.11% so far this year and it's up approximately 10.27% in the last one year (as of 01/29/2024). In that past 52-week period, it has traded between $68.23 and $87.21.
The ETF has a beta of 1.04 and standard deviation of 19.75% for the trailing three-year period, making it a medium risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYF is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $9.41 billion in assets, Financial Select Sector SPDR ETF has $36.11 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)?
The iShares U.S. Financials ETF (IYF - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $2.29 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.64%.
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 Financials sector--about 99% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 12.44% 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 45.13% of total assets under management.
Performance and Risk
The ETF has added roughly 2.11% so far this year and it's up approximately 10.27% in the last one year (as of 01/29/2024). In that past 52-week period, it has traded between $68.23 and $87.21.
The ETF has a beta of 1.04 and standard deviation of 19.75% for the trailing three-year period, making it a medium risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYF is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $9.41 billion in assets, Financial Select Sector SPDR ETF has $36.11 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.