Three financial exchange traded funds seem to be similar, but what makes them different? Roger Nusbaum of TheStreet.com looks at the ETFs and how back testing comes into play. The financial ETFs are PowerShares FTSE RAFI Financial Sectors (PRFF), iShares Dow Jones Financial Sectors (IYF) and S&P Financial Sector SPDR (XLF). In the past month, IYF has gained 2.9%, IYF 2.8% and PRFF was launched just last month.
Each of the ETFs have positions in the same big names, Citigroup (C), Bank of America (BAC), JP Morgan Chase (JPM) and Wells Fargo (WFC). The weightings are similar in capital-market names or REIT’s and they tend toward value. When looking at the back test, PRFF looks to be the strongest. Perhaps it is due to a smaller weighting in Citigroup, which has lagged its sector.
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