Fidelity's broad financial sector fund charges 0.08% versus Invesco's 0.35% banking-focused ETF, but concentrated bank exposure delivered stronger recent returns.
Fidelity's broad financial sector fund charges 0.08% versus Invesco's 0.35% banking-focused ETF, but concentrated bank exposure delivered stronger recent returns.
The Fidelity MSCI Financials Index ETF (FNCL -0.46%) offers a broad, low-cost approach to the financial sector, while the Invesco KBW Bank ETF (KBWB -1.39%) provides concentrated exposure to U.S. banking institutions with a higher expense profile.
Choosing between these two ETFs involves a trade-off between broad sector diversification and targeted industry concentration. While both funds operate within the financial sphere, the Invesco ETF isolates the performance of U.S. banks, whereas the Fidelity fund provides a wider lens that includes payments and insurance firms.
Snapshot (cost & size)
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.
Cost is a primary differentiator in this matchup. The Fidelity fund is significantly more affordable, featuring an expense ratio of just 0.08% compared to the 0.35% charged by the Invesco ETF. While the Fidelity fund costs less to own, the Invesco ETF currently offers a higher payout for income-oriented investors.
Performance & risk comparison
Fidelity MSCI Financials Index ETF provides diversified exposure to the broad U.S. financial sector, with a primary focus on financial services at 97%, technology at 2%, and real estate at 1%. Its largest positions include JPMorgan Chase & Co (JPM -0.86%) at 10.33%, Berkshire Hathaway Inc. (BRKB +0.58%) at 8.45%, and Visa Inc. (V +1.74%) at 7.30%. The fund tracks 404 holdings in total. It was launched in 2013. Fidelity MSCI Financials Index ETF has paid $1.29 per share over the trailing 12 months, which on its recent ~$77.50 share price works out to a 1.7% yield.
Invesco KBW Bank ETF offers a much more concentrated approach, dedicating 100% of its weight to financial services firms specifically within the banking industry. Its largest positions include Wells Fargo & Co (WFC -3.10%) at 8.39%, JPMorgan Chase & Co at 8.11%, and Morgan Stanley (MS -1.78%) at 7.72%. This fund holds just 26 securities. It was launched in 2011. Invesco KBW Bank ETF has paid $1.87 per share over the trailing 12 months, which on its recent ~$87.60 share price works out to a 2.1% yield.
For more guidance on ETF investing, check out the full guide at this link.
Averytin News Financial update.