Financials or Tech: Is XLF or FTEC the Better Buy?
XLF delivers a higher dividend yield with lower volatility, while FTEC has posted a higher return over the past year.
Overview
The State Street Financial Select Sector SPDR ETF (NYSEMKT:XLF) offers lower volatility and higher income by focusing on the financial sector, while the Fidelity MSCI Information Technology Index ETF (NYSEMKT:FTEC) provides high-growth tech exposure.
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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Both funds are inexpensive, with identical expense ratios of 0.08%. However, XLF pays a higher dividend yield of 1.42%, more than a full percentage point above FTEC’s 0.37%. Technology companies tend to reinvest cash into growth rather than return it to shareholders, and the yield gap reflects that.
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Source
Originally published at www.fool.com.