Select Sector SPDR, a pioneer in the exchange-traded fund (ETF) marketplace, welcomes investors to explore its Financials Select Sector SPDR Fund (XLF). XLF offers an effective and convenient solution for investors seeking diversified exposure to the U.S. financial sector without the risk and complexity of picking individual winners and losers.
The XLF tracks an index of S&P 500 financial stocks, with holdings weighted by market capitalization. This means that larger financial institutions have a more significant presence in the ETF.
With this market-cap weighting, the ETF shields investors from the volatility commonly associated with smaller-cap stocks. Over the years, XLF has solidified its position as a trusted vehicle for financial exposure among advisors, investors, and traders.
One key driver that impacts all these companies is interest rates an essential factor for prospective investors. In the current financial landscape, interest rates have been exhibiting a rising trend, influencing borrowing costs and, consequently, the profit margins of companies in the financial sector. This is a crucial consideration for potential investors.
Launched in 1998 as one of the inaugural Select Sector SPDR ETFs, XLF has weathered the financial industry's ebbs and flows for over two decades. It currently boasts over $30 billion in assets under management and is actively traded on the NYSE. Moreover, it maintains an investor-friendly expense ratio of 0.10%*.
A Comprehensive Portfolio of Financial Titans
XLF provides investors access to Wall Street's leading banks and financial institutions, all encapsulated within a single security. Understanding the index methodology and the companies within the portfolio is crucial for informed investing.
The top 10 holdings** of XLF include: Berkshire Hathaway (13.88%), JP Morgan Chase (9.15%), Visa (8.03%), Mastercard (7.16%), Bank of America (4.11%), Wells Fargo (3.25%), S&P Global (2.58%), Goldman Sachs (2.32%), Morgan Stanley (2.26%), and Marsh & McLennan Companies (2.04%).
As the oldest and largest financials ETF in the market, XLF remains a popular choice for those seeking exposure to the sector. It offers a broad approach, featuring a diverse portfolio that encompasses various types of financial firms.
XLF is one of the most actively traded ETFs in the market, regularly trading over $1 billion worth of volume daily. This high trading volume underscores its value as a versatile trading instrument.
With its market-weighted holdings of 72 premier companies in American finance, XLF makes it easy to gain exposure to the country's most critical banks and financial institutions. For investors looking to diversify their portfolios with a finance component, this financial sector fund provides an accessible and cost-effective solution.
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 9/30/23 subject to change
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.
Company: Select Sector SPDRs
Contact: Dan Dolan*
Address: 1290 Broadway, Suite 1000, Denver, CO 80203
Country: United States
*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.
SEL006979 EXP 1/31/24
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Select Sector SPDR
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Everest Market Insights journalist was involved in the writing and production of this article.