Is a Financial Sector ETF a Better Buy Than Picking the Stocks Yourself?
For risk-averse investors, owning an ETF can often be ideal.
Overview
Exchange-traded funds (ETFs) help risk-averse investors tap into sector-specific opportunities without the risks associated with owning individual stocks. One of those is financials, which typically includes everything from banks to insurance companies.
One of the most well-known ETFs in the financials sector is the State Street Financial Select Sector SPDR ETF (NYSEMKT: XLF). XLF seeks to mimic the performance of the Financial Select Sector Index, which aims to represent the financial sector of the S&P 500. But whether owning that ETF is better than an investor picking stocks on their own depends on a few factors.
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Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.