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SPDR Financial ETFs: What Are the Key Differences?

Eric Dutram


While there are many financial ETFs trading in the market, State Street’s XLF is by far the most popular. The fund sees volume in excess of 35 million shares a day while its assets under management tops $17 billion as well.

Though the fund dominates the asset picture for the financial ETF world, there are still some problems with XLF. The fund includes both financial services companies, as well as those in the real estate world. And while this hasn’t been an issue as of late, increased interest rate worries are making it more important than ever to know how your portfolio will do in a shifting rate environment (see all the financial ETFs here).

New Funds

That is probably part of the reason for why State Street launched two new products in the financial market to break out the space a bit more. The company had the debut for the financial services ETF (XLFS) and a real estate (XLRE) fund in order to give investors more options in the segment.

These new ETFs cost the same as XLF but are more concentrated, as XLFS focuses on banks and insurance companies, while XLRE zeroes in on REITs like Simon Property Group or American Tower. This should be very helpful as interest rates continue to fluctuate in the coming months and I’d expect these new funds to perform very differently if we do see some big changes from the FOMC this year (see Worried About Higher Interest Rates? Buy These Four ETFs to Profit).

More Information

That is but the tip of the iceberg for the financial ETF space though as there are other factors to take into account as well. For more on these issues as well as how these new financial stack up against XLF, make sure to watch our short video on the subject below!



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SPDR-FINL SELS (XLF): ETF Research Reports
 
SPDR-RE SELS (XLRE): ETF Research Reports
 
SPDR-FS SELS (XLFS): ETF Research Reports
 
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