The research firm has overweight ratings on the Financial Select Sector SPDR (NYSEArca: XLF), the largest U.S. sector ETF, and the iShares US Broker-Dealers ETF (NYSEArca: IAI). Home to discount brokers such as Charles Schwab (NYSE: SCHW), TD Ameritrade (NasdaqGM: AMTD) and E-Trade Financial (NasdaqGM: EFTC), IAI has benefited as more individual investors join the rally in U.S. stocks. The fund was the best performer among financial services ETFs last year. [2013’s Best Financial Services ETF]
S&P Capital IQ also has overweight ratings on the Vanguard Health Care ETF (NYSEArca: VHT) and the Health Care Select Sector SPDR (NYSEArca: XLV). Health care, one of just two (utilities is the other) S&P 500 sectors to generate positive returns this year, is Main’s third favorite sector.
Earlier this year, State Street Global Advisors, the second-largest U.S. ETF sponsor, lowered the fees on the nine sector SPDRs ETFs to 0.16% per year from 0.18%. [State Street Lowers Fees on Sector ETFs]
Financial Select Sector SPDR
Tom Lydon’s clients own shares of Apple and Google.