The Vanguard Financials ETF (NYSEArca: VFH), by virtue of that ETF holding 542 stocks compared to 87 for XLF, allocates over 22% of its weight to REITs and real estate-related stocks. VFH tracks an MSCI index, meaning significant changes are on the way for that ETF…in two years.
Mortgage REITs will remain in the financial services sector, according to MSCI and S&P Dow Jones Indices.
Financial Select Sector SPDR Industry Weights
Chart Courtesy: State Street
Tom Lydon’s clients own shares of SPY.