Fidelity MSCI Financials Index ETF (NYSEMKT:FNCL) provides broad financial sector exposure and a lower cost, while State Street SPDR S&P Bank ETF (NYSEMKT:KBE) offers concentrated banking access with a higher yield. Investors looking for financial sector exposure may choose between broad-market coverage and a niche banking focus. While both funds hold major financial institutions, their index strategies differ in diversification, cost, and historical volatility profiles, impacting how they may fit into a long-term portfolio.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
With an expense ratio of 0.08%, the Fidelity MSCI Financials Index ETF is more affordable than the State Street SPDR S&P Bank ETF, which charges 0.35%. The State Street SPDR S&P Bank ETF currently offers a higher payout with a 2% yield compared to 1.5% for the Fidelity MSCI Financials Index ETF. Growth of $1,000 over 5 years (total return) Fidelity MSCI Financials Index ETF tracks a broad index covering roughly 97% financial services, 2% technology, and 1% real estate.
Its largest positions include JPMorgan Chase & Co (NYSE:JPM) at 10.50%, Berkshire Hathaway (NYSE:BRKB) at 7.60%, and Visa (NYSE:V) at 6.63%. The fund holds 404 securities and was launched in 2013. Fidelity MSCI Financials Index ETF has paid $1.26 per share over the trailing 12 months, which on its recent ~$83.07 share price works out to a 1.5% yield.
State Street SPDR S&P Bank ETF provides focused exposure to the banking industry within the financial services sector. Its largest positions include The Bancorp (NASDAQ:TBBK) at 1.14%, Corebridge Financial (NYSE:CRBG) at 1.12%, and Equitable Holdings (NYSE:EQH) at 1.11%. The fund tracks a modified equal-weighted index of 103 holdings and was launched in 2005.
State Street SPDR S&P Bank ETF has paid $1.47 per share over the trailing 12 months, which on its recent ~$71.41 share price works out to a 2% yield. For more guidance on ETF investing, check out the full guide at this link. The U.S. financial sector has delivered some of its strongest returns in years, but not every corner of it has moved at the same pace.
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