If you are enticed by the financial services sector, yet you aren’t sure which bank to invest in, exchange traded funds (ETFs) are here to serve you. Selena Maranjian for The Motley Fool reports that the subprime lending mess has left this sector down, but feels they’ll recover, eventually. Plus, there is no shortage of great banking companies that have plenty of room for growth, such as Lehman Brothers (LEH), Merril Lynch (MER), Washington Mutual (WM) or Goldman Sachs (GS).

This is where ETFs come into the picture. Financial ETFs invest in a basket of stocks from various financial companies. One example is the iShares Dow Jones Financials Index Fund (IYF) that invests in around 300 major and minor financial companies. It has a dividend yield of 2% and is currently down 9.7% year-to-date. To focus in on a specific within the financial industry, KBW Bank ETF (KBE) invests in about two dozen major banks. Currently, it’s down 11.9% year-to-date.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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