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Should You Invest in the iShares U.S. Financial Services ETF (IYG)?
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Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the iShares U.S. Financial Services ETF (IYG - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
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.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.56 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYG seeks to match the performance of the Dow Jones U.S. Financial Services Index before fees and expenses.
The Dow Jones U.S. Financial Services Index measures the performance of the financial services 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 1.24%.
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 100% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 14.73% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Visa Inc Class A (V - Free Report) .
The top 10 holdings account for about 62.59% of total assets under management.
Performance and Risk
The ETF has lost about -4.49% and it's up approximately 18.68% so far this year and in the past one year (as of 04/15/2025), respectively. IYG has traded between $62.27 and $84.81 during this last 52-week period.
The ETF has a beta of 1.08 and standard deviation of 21.25% for the trailing three-year period, making it a high risk choice in the space. With about 106 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financial Services ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYG 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 $11.37 billion in assets, Financial Select Sector SPDR ETF has $48.45 billion. VFH has an expense ratio of 0.09% and XLF 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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Should You Invest in the iShares U.S. Financial Services ETF (IYG)?
Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the iShares U.S. Financial Services ETF (IYG - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
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.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.56 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYG seeks to match the performance of the Dow Jones U.S. Financial Services Index before fees and expenses.
The Dow Jones U.S. Financial Services Index measures the performance of the financial services 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 1.24%.
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 100% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 14.73% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Visa Inc Class A (V - Free Report) .
The top 10 holdings account for about 62.59% of total assets under management.
Performance and Risk
The ETF has lost about -4.49% and it's up approximately 18.68% so far this year and in the past one year (as of 04/15/2025), respectively. IYG has traded between $62.27 and $84.81 during this last 52-week period.
The ETF has a beta of 1.08 and standard deviation of 21.25% for the trailing three-year period, making it a high risk choice in the space. With about 106 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financial Services ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYG 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 $11.37 billion in assets, Financial Select Sector SPDR ETF has $48.45 billion. VFH has an expense ratio of 0.09% and XLF 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.