Under The Hood: An Unheard of Bank ETF

Page 1 of 2

Given that the financial services sector is the second-largest sector weight in the S&P 500 and often the industry group most ensconced in controversy, it can be hard to imagine an ETF that tracks bank stocks leading an anonymous existence.

In a year when Financial Select Sector SPDR (NYSEARCA:XLF), the Vanguard Financials (NYSEARCA:VFH) and the iShares Dow Jones US Financial (NYSEARCA:IYF) have produced average returns of almost 24 percent, believing in a bank ETF’s anonymity might seem even harder. Well, believe it or not, there are some bank funds that toil in obscurity and some produced excellent returns in 2012.

Vanguard FTSE Emerging Markets ETF (NYSEARCA:VWO)

Take the iShares MSCI ACWI ex US Financials Sect (NASDAQ:AXFN) as a prime example. This is a fund that ETF critics would love to hate for two reasons. First, average daily volume of just 1,440 shares is sure to scare plenty of folks off. Second, making the volume issue seem all the more off-putting is the fact that the iShares MSCI ACWI ex US Financials Sector Index Fund does not get around to trading everyday.

Third, the fund is almost three years old and has just $1.15 million in assets under management. However, AXFN stands as a prime example of a small ETF that has delivered big returns in 2012.

Without the benefits of high-flying U.S. bank names such as Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C), AXFN has surged 26.1 percent. In fact, AXFN’s 2012 performance is arguably more impressive than those of its peers because this ETF does a better job of spreading its weight around.

AXFN is home to 264 stocks and HSBC Holdings plc (NYSE:HBC), the ETF’s largest holding, receives a weight of just 4.5 percent. The fund’s top-10 holdings represent just 21.4 percent of AXFN’s total weight. By comparison, XLF is home to 83 stocks and its top-10 holdings account for over half that ETF’s weight. Wells Fargo & Company (NYSE:WFC) alone receives an allocation of almost 8.5 percent. IYF’s top-10 holdings account for almost 40 percent of that ETF’s weight with Wells Fargo leading the way with an allocation of 6.4 percent.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!