5 Best Financial and Fintech ETFs To Buy

In this article, we discuss 5 best financial and fintech ETFs to buy. If you want to read our discussion on the financial industry, head directly to 10 Best Financial and Fintech ETFs To Buy. 

5. Invesco KBW Property & Casualty Insurance ETF (NASDAQ:KBWP)

5-Year Performance as of August 9: 34.22%

Invesco KBW Property & Casualty Insurance ETF (NASDAQ:KBWP) tracks the invest results of the KBW Nasdaq Property & Casualty Index. The ETF was introduced on December 2, 2010. As of August 8, 2023, Invesco KBW Property & Casualty Insurance ETF (NASDAQ:KBWP) holds 25 stocks in its portfolio and maintains an expense ratio of 0.35%. It is one of the best financial ETFs to watch. 

American International Group, Inc. (NYSE:AIG) is the largest holding of Invesco KBW Property & Casualty Insurance ETF (NASDAQ:KBWP). American International Group, Inc. (NYSE:AIG) provides insurance products for commercial, institutional, and individual customers worldwide. On August 2, American International Group, Inc. (NYSE:AIG) declared a $0.36 per share quarterly dividend, in line with previous. The dividend is payable on September 29, to shareholders of record on September 15. 

According to Insider Monkey’s first quarter database, 46 hedge funds were bullish on American International Group, Inc. (NYSE:AIG), with combined stakes worth approximately $2 billion. Ric Dillon’s Diamond Hill Capital is the leading stakeholder of the company, with 16 million shares worth $808.8 million. 

Third Point Management made the following comment about American International Group, Inc. (NYSE:AIG) in its Q1 2023 investor letter:

“FIS and American International Group, Inc. (NYSE:AIG) were also hit by the indiscriminate defenestration of most Financials immediately following the collapse of SVB, but AIG has rallied nearly 8% from its lows and our thesis, which we wrote about in our last quarterly letter, remains the same.”

4. SPDR S&P Insurance ETF (NYSE:KIE)

5-Year Performance as of August 9: 36.13%

SPDR S&P Insurance ETF (NYSE:KIE)’s main objective is to achieve investment outcomes that closely align with the overall performance of the S&P Insurance Select Industry Index. The ETF was introduced on November 8, 2005. As of August 9, 2023, the fund offers an expense ratio of 0.35% and has a portfolio of 48 stocks. SPDR S&P Insurance ETF (NYSE:KIE) is one of the best financial ETFs to monitor. 

Brighthouse Financial, Inc. (NASDAQ:BHF) is the largest holding of SPDR S&P Insurance ETF (NYSE:KIE). Brighthouse Financial, Inc. (NASDAQ:BHF) specializes in annuity and life insurance products, and the company’s operations are divided into three segments – Annuities, Life, and Run-off. On August 8, the company reported a Q2 non-GAAP EPS of $4.13, beating Wall Street estimates by $0.75.

According to Insider Monkey’s first quarter database, 27 hedge funds held stakes worth $246.8 million in Brighthouse Financial, Inc. (NASDAQ:BHF), compared to 26 funds in the prior quarter worth $319.7 million. David Einhorn’s Greenlight Capital is the leading position holder in the company, with 3.12 million shares valued at $137.7 million. 

Greenlight Capital made the following comment about Brighthouse Financial, Inc. (NASDAQ:BHF) in its Q1 2023 investor letter:

“Brighthouse Financial, Inc. (NASDAQ:BHF) was the other material loser during the quarter, with shares declining by 14%. In response to the bank failures, partially caused by a few banks buying long duration bonds that fell in value when interest rates rose, the market sold other industries that own long duration bonds as well. Life insurers went to the top of the pile and, well, BHF is a life insurer and owns a lot of bonds. Though BHF is a beneficiary of higher rates by virtue of having very long duration liabilities, which are quite different from short-term deposits that can leave abruptly, the market decided to simply ignore this difference and focus on its exposure to bonds. We don’t believe any of the concern is BHF specific, as other life insurers suffered similar stock performance.”

3. iShares U.S. Insurance ETF (NYSE:IAK)

5-Year Performance as of August 9: 41.14%

iShares U.S. Insurance ETF (NYSE:IAK)’s primary goal is to replicate the investment outcomes of the Dow Jones U.S. Select Insurance Index, which is composed of US insurance sector stocks. The ETF was established on May 01, 2006. As of August 8, 2023, the total assets of iShares U.S. Insurance ETF (NYSE:IAK) amounted to $361.3 million. The ETF’s portfolio consists of 56 stocks, and it offers an expense ratio of 0.40%. iShares U.S. Insurance ETF (NYSE:IAK) is one of the best financial ETFs to watch. 

Chubb Limited (NYSE:CB) is the largest holding of iShares U.S. Insurance ETF (NYSE:IAK). The company provides insurance and reinsurance products worldwide. On July 25, Chubb Limited (NYSE:CB) reported a Q2 non-GAAP EPS of $4.92, beating market estimates by $0.50. Net premiums earned in Q2 increased 15% year-over-year to $10.99 billion, topping Wall Street consensus by $360 million. 

According to Insider Monkey’s first quarter database, 45 hedge funds were bullish on Chubb Limited (NYSE:CB), with combined stakes worth $1.86 billion. Andreas Halvorsen’s Viking Global is the leading position holder in the company, with 3.46 million shares worth just over $673 million. 

Ave Maria World Equity Fund made the following comment about Chubb Limited (NYSE:CB) in its Q1 2023 investor letter:

“Chubb Limited (NYSE:CB) is the world’s largest publicly traded P&C insurance company and a leading commercial lines insurer in the U.S. with operations in 54 countries and territories. Chubb is regarded as one of the most skilled property and casualty underwriters globally with an average P&C combined ratio of 90.8% between 2018 and 2022.”

2. iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSE:IAI)

5-Year Performance as of August 9: 49.10%

iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSE:IAI)’s primary objective is to replicate the investment performance of the Dow Jones U.S. Select Investment Services Index. The ETF offers exposure to different entities in the U.S. investment landscape, including investment banks, discount brokerages, and stock exchanges. The fund was established on May 01, 2006. As of August 7, 2023, iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSE:IAI)’s portfolio consists of 25 stocks, with net assets totaling $413.7 million. The fund offers an expense ratio of 0.40%. It is one of the best financial ETFs to buy. 

The Goldman Sachs Group, Inc. (NYSE:GS) is the largest holding of iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSE:IAI). On July 19, The Goldman Sachs Group, Inc. (NYSE:GS) declared a $2.75 per share quarterly dividend, a 10% increase from its prior dividend of $2.50. The dividend is payable on September 28, to shareholders of record on August 31. 

According to Insider Monkey’s first quarter database, 69 hedge funds were bullish on The Goldman Sachs Group, Inc. (NYSE:GS), compared to 74 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with 3 million shares worth $986.2 million. 

Manole Capital Management made the following comment about The Goldman Sachs Group, Inc. (NYSE:GS) in its Q3 2022 investor letter:

“Back in 2019, The Goldman Sachs Group, Inc. (NYSE:GS) made a splash in the card industry by working with Apple and MasterCard on a credit card. The actual card is fairly sleek (as you can see below), as customers’ names are etched into an Apple titanium card. The no-fee card generated a lot of hype, as many early users were quick to post their latest card on various social media sites.

The initial goal of Marcus (back in 2016) was to leverage Goldman’s wonderful name brand and build a full-service digital bank. This card was a large piece of GS’s ambitions to grow its retail banking franchise called Marcus. After 5 years, Marcus now has 14 million customers and $16 billion in loan balances. Surprisingly, Marcus now represents nearly 20% of the firm’s total revenue.

We thought it would be interesting to look at how the Apple Card is doing in terms of loans and exposures. With over $100 billion in assets, this has been a successful source of cheap deposits for GS. Despite having an institutional / “white shoe” brand in the investment banking and trading world, GS’s Apple Card has been a disappointment.” (Click here to read the full text)

1. SPDR S&P Capital Markets ETF (NYSE:KCE)

5-Year Performance as of August 9: 55.62%

SPDR S&P Capital Markets ETF (NYSE:KCE)’s main aim is to achieve investment results that match the total return performance of the S&P Capital Markets Select Industry Index. SPDR S&P Capital Markets ETF (NYSE:KCE) provides exposure to the capital markets segment of the S&P Total Market Index, which includes the sub-sectors of Asset Management & Custody Banks, Diversified Capital Markets, Financial Exchanges & Data, and Investment Banking & Brokerage. The ETF was established on November 8, 2005. SPDR S&P Capital Markets ETF (NYSE:KCE)’s portfolio consists of 65 stocks and it comes with an expense ratio of 0.35%. It is one of the best financial ETFs to monitor. 

Coinbase Global, Inc. (NASDAQ:COIN) is the largest holding of SPDR S&P Capital Markets ETF (NYSE:KCE). Coinbase Global, Inc. (NASDAQ:COIN) offers financial technology and infrastructure services for the crypto economy worldwide. On August 3, the company reported a Q2 GAAP EPS of -$0.42 and a revenue of $707.9 million, outperforming Wall Street estimates by $0.36 and $70.12 million, respectively. 

According to Insider Monkey’s first quarter database, 28 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN), compared to 27 funds in the preceding quarter. Cathie Wood’s ARK Investment Management held the largest stake in the company, comprising 11.7 million shares worth $795.70 million. 

Here is what Hayden Capital has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:

“Coinbase (NASDAQ:COIN): The crypto ecosystem moves extremely quickly, and there’s been many new developments since we first invested in Coinbase, a year ago. Most notably, crypto market cap has declined from a peak of ~$3 Trillion last fall, to ~$1.1 Trillion today (a -63% decline, and -72% peak-to-trough; LINK). Crypto is a volatile asset class, and has experienced many draw-downs of similar magnitude in the past. For example, Bitcoin was down -93% during 2011, -85% from 2013-15, and -84% from 2017-18. In this context, the latest draw-down is a pretty normal outcome for this emerging asset class.

A large reason for this volatility is simply because there aren’t any major “real-world use cases” for the asset just yet. In our letter outlining the investment last year, we wrote that crypto is still “in the middle of ‘crossing the chasm’ into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact crypto in some form”…” (Click here to see the full text)

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