The Financial Select Sector SPDR FundNYSE American: XLF

If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the Financial Select Sector SPDR ETF (XLF), a passively managed exchange traded fund launched on 12/16/1998.

The Investment Committee give you their top stocks to watch for the second half.

XLF is a low-cost, passively managed ETF heavily weighted in top financial companies, including banks and payment processors like Visa and Mastercard. The Fed's imminent rate cuts will impact financials, with mixed effects on XLF due to lower NIMs and increased loan activity. XLF should be able to perform well in rate-cutting cycles, but it depends on how and why rates are lowered.

Estimates for the Q3 of 2024 for Tech, Finance, Retail, and Utilities sectors have increased in recent weeks.

Analysts have raised the 3Q2024 earnings estimates for the Tech, Finance, Retail, and Utilities sectors lately.

Financial ETFs rebounded this year after a prolonged period of volatility. Fed rate cut hopes may boost bank stocks even more.

As the year's second half unfolds, we've observed a notable shift in market momentum, with investors rotating from leading sectors into those that previously lagged. The financial sector, in particular, has emerged as a standout performer, significantly outpacing the broader market.

The US Federal Reserve released annual stress test results for 31 banks, showing they are well-positioned to withstand a severe recession. The largest financial sector vehicle, the Financial Select Sector SPDR ETF, holds 71 stocks with the 7 largest stocks comprising nearly half of its assets. Despite decent stress test results, I assess XLF as an ETF that has run its course for a while, without offering compelling upside.

If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the Financial Select Sector SPDR ETF (XLF), a passively managed exchange traded fund launched on 12/16/1998.