iShares Dow Jones US Broker-Dealers ETF (NYSEARCA:IAI)
This fund provides exposure to the investment services segment of the broad U.S. financial sector by tracking the Dow Jones U.S. Select Investment Services Index. The product currently holds 23 securities and invests around 59% of total assets in its top 10 holdings. GS, MS and Schwab Charles (SCHW) occupy the top three positions in the basket.
The ETF is appropriate for investors looking to get exposure to brokerage firms, dealers and other facilitators directly involved in the capital markets. The fund has accumulated $154.5 million in AUM while it sees good volume of nearly 80,000 shares a day. The product charges 45 bps in fees per year from investors (read:Why IAI Is a Great Financial ETF).
IAI had a strong run this year, gaining nearly 51% in the year-to-date time frame. The fund currently has a Zacks ETF Rank of 2 or ‘Buy’ rating, with a ‘Medium’ risk outlook.
These three products have clearly outpaced the broader S&P Financial Select Sector SPDR Fund (XLF) and SPDR S&P 500 (SPY) by wide margins and show room for further upside.
Any of the three may be a lucrative pick if the economy continues to improve and if the Fed starts scaling back its asset purchases. Further, any pickup in initial public offerings, mergers and acquisitions, trading and asset management resulting from a strengthening economy would support continued growth for this in focus industry which may have more room to run.
This article is brought to you courtesy of Eric Dutram.