“The CCAR results highlight an ongoing theme within banks that compliance, regulatory, and legal costs are highly elevated across the industry and will be for some time, and the uncertain nature of these costs over the next several years will be one of the biggest factors affecting large banks’ returns on equity,” Ellis said.
The Financial Select Sector SPDR ETF tracks financial stocks taken from the S&P 500. XLF has a 0.16% expense ratio.
The Vanguard Financials ETF tracks financial stocks taken from the MSCI U.S. Investable 2500 Index. Since VFH selects its holdings from a broader universe of stocks, the ETF includes a greater tilt toward mid- and small-cap stocks, compared to XLF’s holdings. VFH has a 0.19% expense ratio.
The iShares ETF tracks the Dow Jones US Financials Index, but IYF comes at a slightly more expensive 0.46% expense ratio.
For more information on the financials sector, visit our financial category.
Max Chen contributed to this article.