Financial Select Sector SPDR Fund (XLF): Complete Beginner's Guide
Financial Select Sector SPDR Fund (XLF) is a financial sector ETF from State Street Global Advisors with an expense ratio of 0.09% and $45.0B in assets under management. Our Beginner Suitability Score: 8/10 (Great for Beginners). 5-year annualized return: 12.80%.
Last updated: April 2026
State Street Global Advisors • Financial Sector
Expense Ratio
0.09%
AUM
$45.0B
Dividend Yield
1.60%
Inception
1998
Beginner Score
8/10
What is Financial Select Sector SPDR Fund?
XLF tracks the financial sector of the S&P 500, including banks, insurance companies, asset managers, and financial services firms. The financial sector is a major pillar of the U.S. economy and tends to benefit from rising interest rates and economic growth. Beginners should know that XLF provides targeted exposure to one sector, which makes it more volatile than a diversified fund but useful for investors with specific views on the financial industry.
XLF is managed by State Street Global Advisors and has been available since 1998. With $45.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.09%, which means for every $10,000 you invest, you pay approximately $9 per year in management fees.
XLF at a Glance — Key Metrics
| Expense Ratio | 0.09% |
| Total Holdings | 73 |
| P/E Ratio | 17.2 |
| Beta | 1.08 |
| Dividend Yield | 1.60% |
| AUM | $45.0B |
| Inception Year | 1998 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in XLF
XLF holds 73 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Berkshire Hathaway Inc. | BRK.B | 13.80% |
| 2 | JPMorgan Chase & Co. | JPM | 11.80% |
| 3 | Visa Inc. | V | 8.20% |
| 4 | Mastercard Inc. | MA | 7.20% |
| 5 | Bank of America Corp. | BAC | 4.80% |
| 6 | Wells Fargo & Co. | WFC | 3.80% |
| 7 | Goldman Sachs Group Inc. | GS | 3.50% |
| 8 | S&P Global Inc. | SPGI | 3.20% |
| 9 | Morgan Stanley | MS | 3.00% |
| 10 | Charles Schwab Corp. | SCHW | 2.80% |
XLF's top holding is Berkshire Hathaway Inc. (BRK.B) at 13.80%, followed by JPMorgan Chase & Co. (JPM) at 11.80% and Visa Inc. (V) at 8.20%. The top 10 holdings account for 62.10% of the fund's 73 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Berkshire Hathaway Inc. | BRK.B | 13.80% |
| 2 | JPMorgan Chase & Co. | JPM | 11.80% |
| 3 | Visa Inc. | V | 8.20% |
| 4 | Mastercard Inc. | MA | 7.20% |
| 5 | Bank of America Corp. | BAC | 4.80% |
| 6 | Wells Fargo & Co. | WFC | 3.80% |
| 7 | Goldman Sachs Group Inc. | GS | 3.50% |
| 8 | S&P Global Inc. | SPGI | 3.20% |
| 9 | Morgan Stanley | MS | 3.00% |
| 10 | Charles Schwab Corp. | SCHW | 2.80% |
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XLF Performance History
Here's how XLF has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
3.50%
1 Year
28.50%
3 Year
10.50%
5 Year
12.80%
10 Year
11.20%
XLF has returned 12.80% annualized over 5 years and 11.20% over 10 years. YTD return is 3.50%.
View data table
| Period | Return |
|---|---|
| YTD | 3.50% |
| 1 Year | 28.50% |
| 3 Year | 10.50% |
| 5 Year | 12.80% |
| 10 Year | 11.20% |
Beginner Suitability Score: 8/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
XLF scores 8/10 because it has very low fees, can be more volatile than the broader market, focuses on 73 selected holdings, and has been available since 1998, giving it a proven track record.
How to Buy XLF — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "XLF" — Use the search bar in your brokerage platform to find Financial Select Sector SPDR Fund.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
XLF Sector Allocation
Here's how XLF distributes its investments across different sectors of the economy:
XLF's largest sector allocation is Banks at 28.5%, followed by Financial Services at 27.5% and Insurance at 19.5%.
View data table
| Sector | Weight |
|---|---|
| Banks | 28.5% |
| Financial Services | 27.5% |
| Insurance | 19.5% |
| Capital Markets | 16.5% |
| Consumer Finance | 4.8% |
| Mortgage REITs | 3.2% |
Dollar Cost Averaging Into XLF
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With XLF's expense ratio of 0.09%, a $10,000 investment would lose approximately $771 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
XLF's expense ratio of 0.09% costs $771 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $45,839.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,632 | $61 |
| 10 | $21,589 | $21,410 | $179 |
| 15 | $31,722 | $31,327 | $395 |
| 20 | $46,610 | $45,839 | $771 |
Pros and Cons of XLF
Pros
- ✓Low 0.09% expense ratio for concentrated financial sector exposure
- ✓Benefits from rising interest rates as banks earn more on lending margins
- ✓Holds the strongest financial companies in America, including Berkshire Hathaway and JPMorgan
- ✓More affordable valuation (lower P/E ratio) than the broader market
Cons
- ✗Heavily concentrated in a single sector that is vulnerable to economic recessions and financial crises
- ✗Top holdings Berkshire Hathaway and JPMorgan represent over 25% of the fund
- ✗Banks face increasing regulatory scrutiny that can limit profitability
XLF vs Similar ETFs
See how XLF stacks up against similar funds:
Frequently Asked Questions
Is XLF a good ETF for beginners?▾
XLF has a Beginner Suitability Score of 8/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of XLF?▾
XLF has an expense ratio of 0.09%. This means for every $10,000 you invest, you pay approximately $9 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in XLF?▾
You can invest in XLF with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does XLF pay dividends?▾
Yes, XLF pays dividends with a current yield of approximately 1.60%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in XLF?▾
The top holdings in XLF include Berkshire Hathaway Inc. (13.80%), JPMorgan Chase & Co. (11.80%), Visa Inc. (8.20%), and more. The fund holds 73 total positions, providing focused exposure to selected companies.
What sectors does XLF invest in?▾
XLF's largest sector allocations are Banks (28.50%), Financial Services (27.50%), Insurance (19.50%). This sector distribution shows a focus on banks stocks.
How much do XLF's fees cost over time?▾
With an expense ratio of 0.09%, a $10,000 investment in XLF would lose approximately $771 to fees over 20 years (assuming 8% annual returns). This is a reasonable fee level.