Fidelity MSCI Financials Index ETF (NYSEMKT:FNCL) offers broad sector exposure with hundreds of holdings, while State Street Financial Select Sector SPDR ETF (NYSEMKT:XLF) provides concentrated liquidity and a large-cap focus within the banking and insurance sectors.
Investors seeking financial sector exposure often choose between these two heavyweights. While Fidelity’s ETF tracks a broad index covering large-, mid-, and small-cap stocks, the State Street fund limits its scope to the financial components within the S&P 500. This structural difference creates distinct risk-reward profiles for those targeting banking, insurance, and capital markets.
Snapshot (cost & size)
|
Metric |
FNCL |
XLF |
|---|---|---|
|
Issuer |
Fidelity |
SPDR |
|
Expense ratio |
0.08% |
0.08% |
|
1-yr return (as of June 19, 2026) |
7.4% |
6.7% |
|
Dividend yield |
1.7% |
1.5% |
|
Beta |
0.87 |
0.79 |
|
AUM |
$2.2 billion |
$51.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Both ETFs are competitively priced with an 0.08% expense ratio, making them two of the most affordable ways to own the sector. However, the Fidelity fund provided a slightly higher payout over the trailing 12 months, delivering a 1.7% yield. XLF maintains a significant size advantage, which often results in tighter spreads for high-volume traders.
Performance & risk comparison
|
Metric |
FNCL |
XLF |
|---|---|---|
|
Max drawdown (5 yr) |
(25.7%) |
(25.8%) |
|
Growth of $1,000 over 5 years (total return) |
$1,678 |
$1,672 |
What’s inside
The State Street ETF targets the financial segment of the S&P 500, holding 76 stocks. Its portfolio includes exposure to banking, insurance, and consumer finance, with its largest positions being Berkshire Hathaway (NYSE:BRKB) at 11.71%, JPMorgan Chase (NYSE:JPM) at 11.69%, and Visa (NYSE:V) at 7.22%. Launched in 1998, the fund has paid out $0.79 per share in dividends over the trailing 12 months.
Fidelity’s ETF provides wider coverage by holding 386 stocks. By reaching beyond the S&P 500, it captures smaller banks and niche financial companies that are excluded from its counterpart. Its largest positions include JPMorgan Chase at 10.43%, Berkshire Hathaway at 7.97%, and Visa at 6.48%. Launched in 2013, the ETF has paid $1.23 per share in dividends over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
These two ETFs share several things in common: identical expense ratios, roughly the same recent returns, and many of the same stocks. XLF’s portfolio is slightly more concentrated in its top three positions, but not by much. Fidelity’s fund holds vastly more stocks, but the top 25 or so names drive the bulk of the ETF’s returns; every position below that threshold is smaller than 1%, and there are many, many positions that are single-digit-basis-point weightings. In other words, there are a lot of stocks that are simply along for the ride in the Fidelity fund. (“We’re just happy to be here!”)