XLF: A Low-Cost Financial ETF with an Attractive Blend of Stocks

The Financial Select Sector SPDR Fund ETF (XLF) is a low-cost investment instrument that offers a diverse blend of financial stocks, making it an attractive option for investors. The fund's rating as a buy is based on its mix of stocks and low cost, making it a suitable choice for those looking to invest in the financial sector.

The Financial Select Sector SPDR ETF (XLF) is a prominent investment vehicle that provides broad exposure to the financial sector of the equity market. Launched on December 16, 1998, by State Street Global Advisors, XLF has amassed assets of over $51.15 billion, making it one of the largest ETFs targeting the financial sector [1].

XLF is designed to mirror the performance of the Financial Select Sector Index, which includes companies from various sub-industries such as diversified financial services, insurance, banks, capital markets, mortgage REITs, consumer finance, and thrifts and mortgage finance [2]. The fund invests substantially all of its assets in the securities comprising the index, with a current allocation of around 100% in the financial sector.

One of the key attractions of XLF is its low cost structure. The annual operating expenses of 0.08% make it one of the least expensive products in the space. Additionally, the ETF has a 12-month trailing dividend yield of 1.36%, providing a modest income stream for investors [1].

The ETF's top holdings include Berkshire Hathaway Inc. Cl B (BRK.B), JPMorgan Chase + Co (JPM), and Visa Inc. Class A Shares (V), which account for about 12.44%, 7.14%, and 5.22% of total assets, respectively. The top 10 holdings make up approximately 55.56% of the total assets under management, indicating a diversified portfolio [1].

Performance-wise, XLF has shown strong returns, with a year-to-date return of 10.78% and a 12-month return of 29.75% as of July 7, 2025. The ETF has traded within a range of $40.84 to $53.19 over the past 52 weeks, reflecting its medium risk profile. The beta of 0.98 and standard deviation of 18.14% over the trailing three-year period suggest moderate volatility compared to the broader market [1].

Investors should also consider the Zacks ETF Rank of 1 (Strong Buy) for XLF, which is based on factors such as expected asset class return, expense ratio, and momentum. This rating underscores the fund's potential as a solid investment option for those seeking exposure to the financial sector [1].

In conclusion, the Financial Select Sector SPDR ETF (XLF) is a low-cost, diversified investment vehicle that offers broad exposure to the financial sector. With a strong track record, low expenses, and a high Zacks ETF Rank, XLF is a suitable choice for investors looking to gain exposure to the financial sector.

References:
[1] https://finance.yahoo.com/news/invest-financial-select-sector-spdr-102007680.html
[2] https://ih.advfn.com/stock-market/AMEX/financial-select-sector-XLF/stock-price