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Financials ETF (XLF) Hits New 52-Week High
Financial Select Sector SPDR ETF (XLF - Free Report) is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and has moved up 28.52% from its 52-week low price of $42.21/share.
Are more gains in store for this ETF? Let us take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed.
XLF in Focus
The underlying Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index. The product charges 8 bps in annual fees (see: all Financials ETFs).
Why the Move?
The financial sector has been an area to watch lately, given the growing likelihood of the Fed cutting interest rates, along with signs of regulatory easing. Expected interest rate cuts starting in September, along with further reductions later in the year, are likely to be a key tailwind for the sector and the fund, as these could lower capital costs for banks.
More Gains Ahead?
Currently, XLF has a Zacks ETF Rank #1 (Strong Buy) and a Medium risk outlook. It might continue its strong performance in the near term, with a positive weighted alpha of 18.14 (as per Barchart.com), which gives cues of a further rally.