Launched on June 12, 2000, the iShares U.S. Financial Services ETF (IYG) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options 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 2, placing it in top 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.97 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.09%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 13.67% of total assets, followed by Jpmorgan Chase & Co (JPM) and Visa Inc Class A (V).The top 10 holdings account for about 62.52% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Financial Services ETF has lost about 1.39% so far, and it's up approximately 6.84% over the last 12 months (as of 07/01/2026). IYG has traded between $80.12 and $95.58 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 17.32% for the trailing three-year period, making it a high risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares U.S. Financial Services ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYG is an excellent 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.
Vanguard Financials Index Fund ETF Shares (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the State Street Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials Index Fund ETF Shares has $12.79 billion in assets, State Street Financial Select Sector SPDR ETF has $51.11 billion. VFH has an expense ratio of 0.09%, and XLF charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares U.S. Financial Services ETF (IYG): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).