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WIKI ANALYSIS
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This article describes an exchange traded fund that tracks an index, commodity, currency, or varied basket of securites. View articles referencing this fund. |
The Financial Select Sector SPDR Fund (XLF)
Profile:
The Financial Select Sector SPDR Fund (NYSE:XLF) is an Exchange Traded Fund (ETF) that seeks to provide investment results that correspond to the price and yield performance of the Financial Select Sector of the S&P 500 Index . The Index includes a broad range of financial service firms including banks, brokerage houses, insurance and other diversified financial holding companies.
ETFs utilize a passive investment approach to invest in a portfolio of stocks that seek to replicate the underlying index, in this case the underlying index is the Financial Select Sector S&P 500 Index. See “Other ETFs in This Family” (below) for additional information.
Fund Sponsor: State Street Global Advisors Inception Date: December, 1998 Inception Share Price: $23.31 Company website: http://www.sectorspdr.com/
Holdings:
| TOP 10 HOLDINGS ( 51.70% OF TOTAL ASSETS) | ||
| Company | Symbol | % Assets |
| AMER EXPRESS INC | AXP | 2.52 |
| BK OF AMERICA CP | BAC | 9.81 |
| BANK OF NY MELLON CP | BK | 2.29 |
| CITIGROUP INC | C | 6.86 |
| GOLDMAN SACHS GRP | GS | 3.42 |
| JP MORGAN CHASE CO | JPM | 10.57 |
| ML CO CMN STK | MER | 2.38 |
| METLIFE INC | MET | 2.36 |
| US BANCORP | USB | 3.86 |
| WELLS FARGO & CO NEW | WFC | 7.63 |
Holdings by Industry
- Diversified Financial Services 31.2%
- Commercial Banks 18.8%
- Insurance 18.8%
- Capital Markets 17.6%
- Real Estate Investment Trusts (REITs) 8.2%
- Consumer Finance 4.5%
- Thrifts & Mortgage Finance 0.8%
- Real Estate Management & Development 0.1%
Other EFTs in this family include:
- XLY: Consumer Discretionary SPDR
- XLP: Consumer Staples SPDR
- XLE: Energy SPDR
- XLV: Health Care SPDR
- XLI: Industrials SPDR
- XLB: Materials SPDR
- XLK: Technology SPDR
- XLU: Utilities SPDR
Investment Strategies:
Sector investing is very popular as various sectors of the economy may rise and fall in response to different economic factors. Some sectors will be counter-cyclical to other sectors. As of the time of this writing (November 2008) the financial sector has been hit hard due to the mortgage crisis and the related credit crisis. The XLF ETF has fallen from its 52-week high of $32.14 in December 2007 to a low of $ 8.67 in November 2008. While nearly all sectors have fallen in this period, some have fallen much more than others. Those who invest in inverse ETFs (see below) benefited from the falling values.
Leveraged ETFs and Inverse ETFs:
ETFs have become so popular that new ones are coming to market rather frequently. The latest version includes “leveraged ETFs” and “inverse ETFs”.
A leveraged ETF seeks to match some multiple of the underlying index. For example, PowerShares QQQ Trust (NASDAQ: QQQ) is an ETF that seeks daily investment results that correspond to the daily performance of the NASDAQ-100 Index. ProShares Ultra QQQ (NYSE: QLD) seeks to double the performance of the QQQ.
An inverse ETF seeks to match the performance of an index, but in the inverse direction. This is normally accomplished by short-selling either the index or the underlying assets. For example, ProShares UltraShort QQQ (NYSE: QID) seeks to double the performance of the NASDAQ-100 Index in the inverse direction. If the NASDAQ-100 is up 5% the ProShares UltraShort QQQ should be down by 10%.
References
Company website: http://www.sectorspdr.com/
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