We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Invest in the iShares U.S. Financial Services ETF (IYG)?
Read MoreHide Full Article
If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the iShares U.S. Financial Services ETF (IYG - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 2, placing it in top 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.50 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.87%.
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 83% of the portfolio, followed by Information Technology.
Looking at individual holdings, Jpmorgan Chase & Co (JPM - Free Report) accounts for about 9.58% of total assets, followed by Visa Inc Class A (V - Free Report) and Mastercard Inc Class A (MA - Free Report) .
The top 10 holdings account for about 52.14% of total assets under management.
Performance and Risk
The ETF has lost about -14% so far this year and is down about -15.73% in the last one year (as of 11/16/2022). In that past 52-week period, it has traded between $140.77 and $202.95.
The ETF has a beta of 1.17 and standard deviation of 33.21% for the trailing three-year period, making it a high risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financial Services 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, IYG is an outstanding 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 $9.27 billion in assets, Financial Select Sector SPDR ETF has $32.63 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Invest in the iShares U.S. Financial Services ETF (IYG)?
If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the iShares U.S. Financial Services ETF (IYG - Free Report) , a passively managed exchange traded fund launched on 06/12/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 2, placing it in top 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.50 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.87%.
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 83% of the portfolio, followed by Information Technology.
Looking at individual holdings, Jpmorgan Chase & Co (JPM - Free Report) accounts for about 9.58% of total assets, followed by Visa Inc Class A (V - Free Report) and Mastercard Inc Class A (MA - Free Report) .
The top 10 holdings account for about 52.14% of total assets under management.
Performance and Risk
The ETF has lost about -14% so far this year and is down about -15.73% in the last one year (as of 11/16/2022). In that past 52-week period, it has traded between $140.77 and $202.95.
The ETF has a beta of 1.17 and standard deviation of 33.21% for the trailing three-year period, making it a high risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Financial Services 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, IYG is an outstanding 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 $9.27 billion in assets, Financial Select Sector SPDR ETF has $32.63 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.