https://money.usnews.com/investing/funds/slideshows/9-great-financial-etfs-to-buy-now?src=usn_invested_nlGreat Financial ETFs to Buy Now
March 21, 2019
Though the stock market has been more volatile in recent months, the U.S. economy continues to run strong. The unemployment rate dipped in February to 3.8 percent, according to the Bureau of Labor and Statistics, and consumer spending readings remain near the highest levels in decades.
While nobody knows what the future holds, economic conditions like this bode very well for financial stocks. Americans with a decent job are more likely to splurge on a credit card purchase or take out loans for cars or homes. If you're looking to invest in this trend and tap into the potential strength of the financial sector, here are nine ways to do that through exchange-traded funds.
Financial Select Sector SPDR Fund (ticker: XLF). The largest of all financial sector-focused ETFs with nearly $25 billion in assets under management, the XLF fund is an easy way to put more of America's biggest financial names in your portfolio. Top holdings include JPMorgan Chase & Co. (JPM) and Berkshire Hathaway (BRK.B), the investment giant led by Warren Buffett.
This is a market cap-weighted portfolio so the very biggest of the big banks make up the lion's share of holdings. Berkshire and JPM are both more than 10 percent of the portfolio and the top 10 holdings represent a little more than half of all assets. Furthermore, the fund only has 68 holdings. Still, many investors like XLF's focused nature.
Vanguard Financials ETF (VFH). The second-largest financials fund, this Vanguard ETF has almost $8 billion in assets. It differs from XLF with a much deeper bench of stocks in its portfolio, with more than 400 holdings. Still, it's worth noting that the same bias toward banking in general still exists with about 28 percent of the fund in large diversified banks like Bank of America Corp. (BAC) and another 16 percent in smaller regional banks such as Citizens Financial Group (CFG).
The VFH gives more exposure across more stocks – and a rock-bottom expense ratio of just 0.1 percent, or $10 annually on each $10,000 invested. – Jeff Reeves
