Best Financial Sector ETFs (2026)
Which financial sector fund to hold — 9 funds ranked on cost, yield, return, risk and ETFValuer's overall grade.
Every figure on this page is recalculated from market data each day, so the ranking reflects current conditions rather than whenever this page was written. Educational content — not financial advice.
Top Picks Right Now
- best risk-adjusted return (Sharpe 1.34)
- strongest 3-year return at +128.8%
- cheapest in the group at 0.08%
- largest and most liquid at $51.4B
Ranked by ETFValuer's overall score. Recalculated every day from live market data — these positions change as the underlying numbers move.
At a Glance
Each superlative is measured within this group of 9 funds, not across the whole market.
All 9 Funds Ranked
| Fund | Category | Cost | Yield | 1Y | 3Y | Volatility | Max DD | Sharpe | AUM | Score | Grade |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 KBWBInvesco KBW Bank ETF | Financial | 0.35% | 2.00% | +32.2% | +128.8% | 20.4% | -25.4% | 1.34 | $6.5B | 71.8 | B |
| 2 XLFState Street Financial Select Sector SPDR ETF | Financial | 0.08% | 1.04% | +7.7% | +67.1% | 14.6% | -15.5% | 0.18 | $51.4B | 64.8 | C |
| 3 IAKiShares U.S. Insurance ETF | Financial | 0.38% | 2.54% | +17.6% | +73.1% | 15.9% | -11.6% | 0.79 | $422M | 63.6 | C |
| 4 VFHVanguard Financials Index Fund ETF Shares | Financial | 0.09% | 1.77% | +8.2% | +69.4% | 14.9% | -17.3% | 0.22 | $13.8B | 61.7 | C |
| 5 KREState Street SPDR S&P Regional Banking ETF | Financial | 0.35% | 2.14% | +22.4% | +69.2% | 23.0% | -28.2% | 0.76 | $4.7B | 58.8 | C |
| 6 FNCLFidelity MSCI Financials Index ETF | Financial | 0.08% | 1.65% | +8.1% | +69.3% | 14.9% | -17.3% | 0.21 | $2.2B | 58.7 | C |
| 7 IYFiShares U.S. Financials ETF | Financial | 0.38% | 0.81% | +10.1% | +76.8% | 14.5% | -16.6% | 0.35 | $3.9B | 58.4 | C |
| 8 KBEState Street SPDR S&P Bank ETF | Financial | 0.35% | 2.15% | +20.9% | +79.3% | 21.3% | -26.0% | 0.75 | $1.5B | 57.8 | C |
| 9 IAIiShares U.S. Broker-Dealers & Securities Exchanges ETF | Financial | 0.38% | 1.17% | +9.2% | +98.8% | 20.1% | -23.1% | 0.21 | $1.3B | 51.2 | C |
Max DD is the deepest peak-to-trough fall over the measurement window. Sharpe ratio measures return per unit of volatility — higher is better. Every figure is recalculated daily.
What Makes a Good Fund Here
Financial funds are highly sensitive to interest rates and to credit conditions. Regional-bank funds in particular carry concentration risk that broad financial funds dilute.
The ETFValuer score blends trailing return, risk-adjusted return, expense ratio, maximum drawdown, fund size and volatility, each percentile-ranked against the full tracked universe, into a single 0-100 figure graded A+ to F. It is a systematic summary of past data, not a forecast — read it alongside the individual columns rather than instead of them.
Head-to-Head Comparisons
Full metric-by-metric breakdowns for the closest calls in this group.
Frequently Asked Questions
What is the best financial sector ETF?
KBWB leads the 9 financial funds tracked with a score of 71.8 (B).
Are bank ETFs risky?
Banks are leveraged businesses, which means their equity can move violently on relatively small changes in asset values — as the 2023 regional-bank episode showed. Regional-bank funds are considerably more concentrated than broad financial funds.
Compare any of these funds directly
Side-by-side metrics, holdings overlap and return correlation for any pair.