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Should You Invest in the iShares Global Financials ETF (IXG)?

Sweta Killa
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If you're interested in broad exposure to the Financials - Broad segment of the U.S. equity market, look no further than the iShares Global Financials ETF (IXG), a passively managed exchange traded fund launched on 11/12/2001.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways 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 6, placing it in top 38%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $631.44 M, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the U.S. equity market. IXG seeks to match the performance of the S&P Global 1200 Financials Sector Index before fees and expenses.

The S&P Global 1200 Financials Sector Index measures the performance of companies are part of the financial sector of the economy.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.15%.

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.

Looking at individual holdings, Berkshire Hathaway Inc Class B (BRKB) accounts for about 5.16% of total assets, followed by Jpmorgan Chase & Co (JPM) and Bank Of America Corp (BAC).

The top 10 holdings account for about 28.21% of total assets under management.

Performance and Risk

So far this year, IXG has lost about -1.32%, and was up about 13.80% in the last one year (as of 05/09/2018). During this past 52-week period, the fund has traded between $60.69 and $75.99.

The ETF has a beta of 1.13 and standard deviation of 16.69% for the trailing three-year period, making it a medium risk choice in the space. With about 207 holdings, it effectively diversifies company-specific risk.

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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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
Bank of America Corporation (BAC) : Free Stock Analysis Report
 
ISHARS-GLB FINL (IXG): ETF Research Reports
 
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