Investment Education

The iShares U.S. Financials ETF (IYF) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad 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 - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $3.84 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYF seeks to match the performance of the Dow Jones U.S. Financials Index before fees and expenses.

The Russell 1000 Financials 40 Act 15/22.5 Daily Capped Index measures the performance of the financial 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 1.20%.

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 99.50% of the portfolio.

Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 11.89% of total assets, followed by Jpmorgan Chase & Co (JPM) and Bank Of America Corp (BAC).

The top 10 holdings account for about 45.66% of total assets under management.

Performance and Risk

The ETF has added about 35.83% so far this year and it's up approximately 42.74% in the last one year (as of 12/10/2024). In that past 52-week period, it has traded between $82.08 and $119.05.

The ETF has a beta of 1.05 and standard deviation of 19.46% for the trailing three-year period, making it a medium risk choice in the space. With about 142 holdings, it effectively diversifies company-specific risk.