With this week being filled with earnings releases from a bevy of Broker Dealers, this allows us to focus on a handful of ETFs that concentrate in the space.
The iShares DJ U.S. Broker Dealers (IAI) is the largest ETF in terms of assets that focuses specifically on the B/D space, and with a number of holdings in the ETF including GS, SCHW, AMTD, and MS reporting earnings this week, we would recommend monitoring the ETF closely. MS for instance is the second largest holding in IAI at 7.1%.
Two other ETFs fall in the Broker Dealers/Capital Markets space, which is a subset of the general Financials sector.
SPDR S&P Capital Markets (KCE) owns equities that are involved in the B/D businesses, asset managers, trust and custody banks, as well as exchanges (stock, futures, or otherwise).
Similarly, PowerShares Capital Markets Portfolio (KBWC) launched at the end of last year, and tracks the KBW Capital Markets Index.
Year to date, KCE has rallied 10.48%, while IAI is up 2.72% and KBWC has risen 0.38%.
It is important to note that IAI hones in specifically on “Broker/Dealers” and thus does not have exposure to names such as Legg Mason and Federated Investors for instance, equities that are included in the “Capital Markets” space. Thus, this would explain the performance differentials cited above since these funds are not entirely “apples to apples.”
iShares DJ U.S. Broker Dealers
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- Broker Dealers