Launched on December 16, 1998, the State Street Financial Select Sector SPDR ETF (XLF Quick QuoteXLF - Free Report) is a passively managed exchange traded fund designed to provide a 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.

Additionally, sector ETFs offer convenient ways 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 5, placing it in top 31%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $53.25 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

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 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 1.33%.

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 12.02% of total assets, followed by Jpmorgan Chase + Co (JPM) and Visa Inc Class A Shares (V).

The top 10 holdings account for about 56.34% of total assets under management.

Performance and Risk

Year-to-date, the State Street Financial Select Sector SPDR ETF has lost about 0.99% so far, and is up roughly 15.3% over the last 12 months (as of 01/14/2026). XLF has traded between $43.92 and $56.4 in this past 52-week period.

The ETF has a beta of 0.93 and standard deviation of 16.38% for the trailing three-year period, making it a medium risk choice in the space. With about 79 holdings, it effectively diversifies company-specific risk.

Alternatives

State Street 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 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.

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 $4.68 billion in assets, Vanguard Financials ETF has $13.30 billion. EUFN has an expense ratio of 0.49%, and VFH charges 0.09%.

Bottom Line

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