Top Financials ETFs Poised To Rally Further

February 03, 2017

The financials sector is hot. Since the U.S. presidential election on Nov. 8, it's the best-performing sector of the stock market, with gains of more than 17%.

Even going back a full year, financials are at the top of the pack when it comes to returns.

Sector Return Since Election (%)
Financials 17.26
Materials 11.35
Telecom 9.63
Industrials 8.59
Consumer Disc. 8.17
Tech 6.50
Health Care 4.69
Energy 4.47
Real Estate 0.58
Consumer Staples -0.21
Utilities -0.83

 

According to Brad Sorensen, head of market and sector analysts for the Schwab Center for Financial Research, the financials sector was "supercharged after the election as the prospects of a lighter regulatory environment, a steeper yield curve and the Fed’s December hike drew investors back to the long-shunned sector."

Sorensen, like many analysts, expects financials to continue to outperform the broader market. He points to growing financial strength among financial firms, improving consumer finances, and reduced regulatory burden as driving the group higher in the coming year.

If that bullish thesis for the sector comes to pass, financial exchange-traded funds may turn out to be some of the best performers again for a second year in a row. Here we take a look at the different ETF options available for investing in the space.

Broad Financial Sector Options

There are currently 53 funds listed in the ETF.com Financial Channel. All together, these ETFs have about $48.5 billion in assets. As is typical in the exchange-traded fund world, just a few products have the bulk of the assets. The top five financials ETFs account for 75% of the total assets, while the top 10 account for 86%.

Here are the top 10:

 

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