If the recent under-performance in XLF continues for several weeks here, we may very well see portfolio managers making re-balance trades related to either specific tax situations if not re-adjusting their exposure to Financials in general since there are a bevy of Financials based equity ETFs on the marketplace, not all with the same exposure as XLF.
XLF remains the largest by a mile in terms of assets under management ($15.3 billion), and other funds in the space to note that may see a pick-up in activity in the near term include KBE (SPDR KBW Bank, Expense Ratio 0.35%), KRE (SPDR KBW Regional Banking, Expense Ratio 0.35%), VFH (Vanguard Financials Index, Expense Ratio 0.19%), IYF (iShares U.S. Financial Sector, Expense Ratio 0.48%), IYG (iShares U.S. Financial Services, Expense Ratio 0.48%), IAT
(iShares U.S. Regional Banks, Expense Ratio 0.48%), and FXO (First Trust Financial AlphaDEX, Expense Ratio 0.70%) to name a few.
With thirty eight Financials based long equity ETPs in on the marketplace at the moment, the recent shakeup in XLF will undoubtedly provide opportunities for institutional managers to consider re-shuffling their ETF holdings going into year’s end.
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