Broker Dealer ETF (IAI) In Focus On High Frequency Trading [iShares Dow Jones US Brok-Dea. Ind.ETF]

IAI in Focus

This fund provides exposure to the investment services corner of the broader financial sector of the U.S. economy by tracking the Dow Jones U.S. Select Investment Services Index. The product holds 22 stocks in its basket with the largest allocation going to Goldman Sachs (GS), Morgan Stanley (MS) and SCHW. These three firms make up for over 6% share each (see: all the Financial ETFs here).

The ETF has a nice mixture of all cap securities with 41% going to small caps, 35% to large caps, and the rest to mid caps. It has a certain tilt toward value securities while growth and blend stocks collectively account for more than half of the portfolio. The product is rich in AUM with nearly $238.7 million and average daily volume of more than 114,000 shares. Expense ratio came in at 0.45%.

IAI pays out a decent yield of 1.20% per annum. The prospect of increasing dividend and buybacks calls for an optimistic outlook on the ETF. Financials has accounted for the largest increase in dividends in the last four years. This year has already seen dividend/buyback increases by finance companies following approval from the Fed after passing stress tests.

Further, the fund currently has a Zacks ETF Rank of 1 or ’Strong Buy’ with a Medium risk outlook, suggesting that the product would outperform the broad market in the coming months. Moreover, the Zacks Industry Rank confirms the bullish trend for this space, as investment brokers actually have a great Rank (in the top 26%) at the time of writing. This suggests a bright outlook on these companies for the months ahead.

This article is brought to you courtesy of Sweta Killa.

Pages: 1 2

Leave a Reply

Your email address will not be published. Required fields are marked *