Launched on December 16, 1998, the State Street Financial Select Sector SPDR ETF (XLF) is a passively managed exchange traded fund designed to provide a 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.
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 5, placing it in top 31%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $56.17 billion, making it the largest ETF attempting to match the performance of the Financials - Broad segment of the equity market. XLF seeks to match the performance of the Financial Select Sector Index before fees and expenses.
The Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index.
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 0.08%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 100% of the portfolio.
Looking at individual holdings, Berkshire Hathaway Inc Cl B (BRK.B) accounts for about 12.04% of total assets, followed by Jpmorgan Chase + Co (JPM) and Visa Inc Class A Shares (V).The top 10 holdings account for about 57.11% of total assets under management.
Performance and Risk
Year-to-date, the State Street Financial Select Sector SPDR ETF has added about 3.25% so far, and was up about 8.64% over the last 12 months (as of 07/22/2026). XLF has traded between $47.81 and $56.75 in this past 52-week period.
The ETF has a beta of 0.86 and standard deviation of 15.84% for the trailing three-year period, making it a medium risk choice in the space. With about 80 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street Financial Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLF is an outstanding 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.
iShares U.S. Financials ETF (IYF) tracks Dow Jones U.S. Financials Index and the Vanguard Financials Index Fund ETF Shares (VFH) tracks MSCI US Investable Market Financials 25/50 Index. iShares U.S. Financials ETF has $4.48 billion in assets, Vanguard Financials Index Fund ETF Shares has $13.31 billion. IYF has an expense ratio of 0.38%, and VFH charges 0.09%.
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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State Street Financial Select Sector SPDR ETF (XLF): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).