The iShares U.S. BrokerDealers & Securities Exchanges ETF (
IAI Quick Quote IAI - Free Report) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.
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 are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Brokers/ Capital markets is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
The fund is sponsored by Blackrock. It has amassed assets over $425.52 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. IAI seeks to match the performance of the Dow Jones U.S. Select Investment Services Index before fees and expenses.
The Dow Jones U.S. Select Investment Services Index measures the performance of the investment services sector of the U.S. equity market.
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 0.42%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.13%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, Morgan Stanley (
MS Quick Quote MS - Free Report) accounts for about 19.52% of total assets, followed by Goldman Sachs Group Inc ( GS Quick Quote GS - Free Report) and Charles Schwab Corp ( SCHW Quick Quote SCHW - Free Report) .
The top 10 holdings account for about 77.22% of total assets under management.
Performance and Risk
So far this year, IAI has added roughly 19.75%, and it's up approximately 71.23% in the last one year (as of 04/14/2021). During this past 52-week period, the fund has traded between $55.14 and $96.74.
The ETF has a beta of 1.10 and standard deviation of 27.70% for the trailing three-year period, making it a high risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.
IShares U.S. BrokerDealers & Securities Exchanges 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, IAI 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.
SPDR S&P Capital Markets ETF (
KCE Quick Quote KCE - Free Report) tracks S&P Capital Markets Select Industry Index. The fund has $85.72 million in assets. KCE has an expense ratio of 0.35%. Bottom Line
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Zacks ETF Center.