Bank ETF FTXO Delivered a 20% Return Over the Last Year. Here's Why I'd Choose IYF Instead.
FTXO targets banks with concentrated holdings and higher volatility, while IYF offers broader sector exposure at lower cost.
Overview
The First Trust Nasdaq Bank ETF (NASDAQ:FTXO) offers targeted exposure to the banking industry, while the iShares U.S. Financials ETF (NYSEMKT:IYF) provides a broader, more diversified play on the entire financials sector at a lower cost.
Financial ETFs often look similar on the surface, but the underlying index methodology can create vast differences in risk and reward. While both funds target American financial institutions, they diverge significantly in their concentration levels, fee structures, and how they handle market volatility.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
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Source
Originally published at www.fool.com.