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Should You Invest in the Financial Select Sector SPDR ETF (XLF)?
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The Financial Select Sector SPDR ETF (XLF - Free Report) was launched on December 16, 1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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 2, placing it in top 13%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $53.72 billion, making it the largest ETF attempting to match the performance of the Financials - Broad segment of the equity market. XLF seeks to match the performance of the Financial Select Sector Index before fees and expenses.
The Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index.
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 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that 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, Berkshire Hathaway Inc Cl B (BRK.B) accounts for about 11.61% of total assets, followed by Jpmorgan Chase + Co (JPM) and Visa Inc Class A Shares (V).
The top 10 holdings account for about 54.56% of total assets under management.
Performance and Risk
The ETF has added about 10.53% and was up about 19.67% so far this year and in the past one year (as of 09/08/2025), respectively. XLF has traded between $43.92 and $54.06 during this last 52-week period.
The ETF has a beta of 1.00 and standard deviation of 17.73% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.
Alternatives
Financial Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLF 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.
iShares MSCI Europe Financials ETF (EUFN) tracks MSCI Europe Financials Index and the Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index. iShares MSCI Europe Financials ETF has $4.36 billion in assets, Vanguard Financials ETF has $12.78 billion. EUFN has an expense ratio of 0.48%, and VFH charges 0.09%.
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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Should You Invest in the Financial Select Sector SPDR ETF (XLF)?
The Financial Select Sector SPDR ETF (XLF - Free Report) was launched on December 16, 1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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 2, placing it in top 13%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $53.72 billion, making it the largest ETF attempting to match the performance of the Financials - Broad segment of the equity market. XLF seeks to match the performance of the Financial Select Sector Index before fees and expenses.
The Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index.
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 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that 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, Berkshire Hathaway Inc Cl B (BRK.B) accounts for about 11.61% of total assets, followed by Jpmorgan Chase + Co (JPM) and Visa Inc Class A Shares (V).The top 10 holdings account for about 54.56% of total assets under management.
Performance and Risk
The ETF has added about 10.53% and was up about 19.67% so far this year and in the past one year (as of 09/08/2025), respectively. XLF has traded between $43.92 and $54.06 during this last 52-week period.
The ETF has a beta of 1.00 and standard deviation of 17.73% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.
Alternatives
Financial Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLF 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.
iShares MSCI Europe Financials ETF (EUFN) tracks MSCI Europe Financials Index and the Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index. iShares MSCI Europe Financials ETF has $4.36 billion in assets, Vanguard Financials ETF has $12.78 billion. EUFN has an expense ratio of 0.48%, and VFH charges 0.09%.
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.