Another ETF in the BCM strategy is the $3.9 billion iShares U.S. Technology ETF (NYSEArca: IYW), a fund that features one of the largest combined allocations to Apple (NasdaqGS: AAPL) and Google (NasdaqGS: GOOG) of any ETF. Those stocks combine for 27.1% of IYW’s weight. S&P Capital IQ also rates IYW overweight.
Other ETFs currently featured in the BCM strategy, according to S&P Capital IQ, include the iShares Dow Jones US Industrial Sector Index Fund (NYSEArca: IYJ), the iShares U.S. Basic Materials ETF (NYSEArca: IYM) and the Financial Select Sector SPDR (NYSArca: XLF). XLF, the largest U.S. sector ETF by assets, and IYJ are rated overweight by S&P Capital while the research firm rates IYM marketweight.
XLF merits near-term consideration as the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR) program is underway, meaning a significant percentage of the ETF’s holdings could announce increased shareholder rewards, including buybacks and dividends, early in the second quarter. Research firm Markit recently forecast a 25% increase in XLF’s dividend. [These ETFs Will Win on Higher Bank Dividends]
Financial Select Sector SPDR
Tom Lydon’s clients own shares of Apple and Google.