If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the iShares U.S. Financials ETF (IYF), a passively managed exchange traded fund launched on 05/22/2000.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options 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 $3.49 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.40%.
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 99.50% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 13.41% of total assets, followed by Jpmorgan Chase & Co (JPM) and Bank Of America Corp (BAC).
The top 10 holdings account for about 47.76% of total assets under management.
Performance and Risk
The ETF has lost about -3.36% and it's up approximately 19.25% so far this year and in the past one year (as of 04/15/2025), respectively. IYF has traded between $89.39 and $119.37 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 20.08% for the trailing three-year period, making it a medium risk choice in the space. With about 142 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 a great 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) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) 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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iShares U.S. Financials ETF (IYF): ETF Research Reports
Bank of America Corporation (BAC) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Financial Select Sector SPDR ETF (XLF): ETF Research Reports
Vanguard Financials ETF (VFH): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research