Investment Education

Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the iShares U.S. Financial Services ETF (IYG), a passively managed exchange traded fund launched on 06/12/2000.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 1, placing it in top 6%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.75 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Broad segment of the equity market. IYG seeks to match the performance of the Dow Jones U.S. Financial Services Index before fees and expenses.

The Dow Jones U.S. Financial Services Index measures the performance of the financial services 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 1.08%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 Class B (BRK.B) accounts for about 13.75% of total assets, followed by Jpmorgan Chase & Co (JPM) and Visa Inc Class A (V).

The top 10 holdings account for about 60.92% of total assets under management.

Performance and Risk

The ETF has gained about 8.12% so far this year and it's up approximately 38.58% in the last one year (as of 02/10/2025). In that past 52-week period, it has traded between $60.83 and $84.65.

The ETF has a beta of 1.17 and standard deviation of 20.59% for the trailing three-year period, making it a high risk choice in the space. With about 106 holdings, it effectively diversifies company-specific risk.