Jim Cramer: Are ETFs Making Stocks Irrelevant? (XLF, JPM, BAC, C)

“Does picking individual stocks even matter anymore?” Cramer asked Tuesday. “Does all the homework that I am constantly urging you to do, the research, the listening to conference calls, count for anything in this market?” Maybe not. “The Mad Money host was expressing his discontent for the “commodization of stocks,” where equities trade in lockstep like baskets of corn or lumber, instead of as shares of distinct, individual companies. Differences between companies in the same sector, he said, seems to matter less to the performance of their stocks. This is thanks to the proliferation of exchange-traded funds, Cramer said, especially the ultra ETFs that give traders up to three-times the buying and selling power,” Drew Sandholm Reports From CNBC.

To illustrate his point, Cramer sought the help of technical analyst Tim Collins. They examined the charts of the Financial Select Sector SPDR ETF (NYSE:XLF), which tracks all major bank stocks, and two banks—one that’s doing well, JPMorgan Chase (NYSE:JPM), and one that’s doing poorly, Bank of America (NYSE:BAC). What they found, Cramer said, is “chilling.” “These charts say that in this market the homework’s worthless,” Cramer said. “It doesn’t matter if you buy a high-quality bank stock like JPMorgan or one that’s seen as being much more risky and speculative like Bank of America. Or an ETF that lets you own all the banks, for that matter. Their stocks are going to move together, like synchronized swimmers, regardless of what’s happening at the individual companies.”

We have put together some more details on the Financial Select Sector SPDR ETF (NYSE:XLF) including a list of the banks within the ETF below:

Financial Select Sector SPDR ETF (NYSE:XLF) Visit Our (XLF) Category: HERE

The investment includes companies from the following industries: banks, diversified financials, insurance and real estate. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is nondiversified.   

  Name Symbol Index Weight
1 JPMorgan Chase & Co. (JPM) 9.80%
2 Bank of America Corp. (BAC) 9.57%
3 Wells Fargo & Co. (WFC) 8.86%
4 Berkshire Hathaway’B’ (BRK.B) 8.04%
5 Citigroup Inc. (C) 5.91%
6 Goldman Sachs Group Inc. (GS) 4.39%
7 American Express Co. (AXP) 3.23%
8 U.S. BANCORP (USB) 2.85%
10 MetLife Inc. (MET) 2.04%
11 PNC Financial Services Group Inc. (PNC) 2.01%
12 Bank of New York Mellon Corp. (BK) 1.98%
13 Prudential Financial Inc. (PRU) 1.61%
14 Travelers Cos. Inc. (TRV) 1.54%
15 Simon Property Group Inc. (SPG) 1.52%
16 AFLAC Inc. (AFL) 1.40%
17 Capital One Financial Corp. (COF) 1.25%
18 BB&T Corp. (BBT) 1.20%
19 State Street Corp. (STT) 1.17%
20 CME Group Inc. Cl A (CME) 1.11%
21 Chubb Corp. (CB) 1.04%
22 Allstate Corp. (ALL) 0.96%
23 Charles Schwab Corp. (SCHW) 0.87%
24 Franklin Resources Inc. (BEN) 0.85%
25 Progressive Corp. (PGR) 0.81%
26 SunTrust Banks Inc. (STI) 0.80%
29 T. Rowe Price Group Inc. (TROW) 0.78%
30 Loews Corp. (L) 0.77%
31 Marsh & McLennan Cos. (MMC) 0.77%
32 Vornado Realty Trust (VNO) 0.74%
33 Northern Trust Corp. (NTRS) 0.74%
35 Boston Properties Inc. (BXP) 0.65%
36 Hartford Financial Services Group Inc. (HIG) 0.65%
37 Ameriprise Financial Inc. (AMP) 0.62%
38 HCP Inc. (HCP) 0.61%
39 AON Corp. (AON) 0.61%
40 Host Hotels & Resorts Inc. (HST) 0.59%
41 INVESCO Ltd. (IVZ) 0.55%
42 Regions Financial Corp. (RF) 0.54%
43 Avalonbay Communities Inc. (AVB) 0.51%
44 Discover Financial Services (DFS) 0.51%
45 Principal Financial Group Inc. (PFG) 0.50%
46 IntercontinentalExchange Inc. (ICE) 0.49%
47 Lincoln National Corp. (LNC) 0.47%
48 Ventas Inc. (VTR) 0.47%
49 UNUM GROUP (UNM) 0.46%
50 M&T Bank Corp. (MTB) 0.46%
51 KEYCORP (KEY) 0.45%
53 Genworth Financial Inc. Cl A (GNW) 0.44%
54 Comerica Inc. (CMA) 0.43%
55 Hudson City Bancorp Inc. (HCBK) 0.37%
56 XL Group PLC (XL) 0.37%
57 Plum Creek Timber Co. Inc. REIT (PCL) 0.37%
58 Kimco Realty Corp. (KIM) 0.35%
59 SLM CORP. (SLM) 0.34%
60 Health Care REIT Inc. (HCN) 0.33%
61 People’s United Financial Inc. (PBCT) 0.32%
62 American International Group Inc. (AIG) 0.31%
63 Legg Mason Inc. (LM) 0.30%
64 PROLOGIS (PLD) 0.30%
65 Cincinnati Financial Corp. (CINF) 0.27%
66 Moody’s Corp. (MCO) 0.27%
67 Marshall & Ilsley Corp. (MI) 0.27%
68 Huntington Bancshares Inc. (HBAN) 0.27%
69 Torchmark Corp. (TMK) 0.26%
70 Assurant Inc. (AIZ) 0.25%
71 Leucadia National Corp. (LUK) 0.24%
72 Zions Bancorp (ZION) 0.24%
73 CB Richard Ellis Group Inc. Cl A (CBG) 0.23%
74 First Horizon National Corp. (FHN) 0.17%
75 NASDAQ OMX Group Inc. (NDAQ) 0.16%
76 E*TRADE Financial Corp. (ETFC) 0.15%
77 Apartment Investment & Management Co. (AIV) 0.15%
78 Federated Investors Inc. (FII) 0.11%
79 Janus Capital Group Inc. (JNS) 0.11%

Chart forFinancial Select Sector SPDR (XLF)

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