Overall, it hasn’t been a good year for the financial sector as evidenced by the S&P 500 Financials index down 1.71 percent year-to-date. Things could get more interesting if blockchain technology, the underlying technology that forms the basis of cryptocurrencies, takes off and disrupts or vastly improves the industry.
In terms of total assets, three of the top five biggest financial sector ETFs are down for the year:
- Financial Select Sector SPDR (NYSEArca: XLF)–down 2.26%
- Vanguard Financials ETF (NYSEArca: VFH)–down 0.99%
- iShares US Financials ETF (NYSEArca: IYF)–down 0.53%
While cryptocurrencies may cover a niche market as of now, the underlying technology known as blockchain could be far-reaching. Financial services provider UBS Group CEO Sergio Ermotti recently stated that blockchain technology will be an essential component for the financial services industry.