The barrage of key earnings reports from big banks this week will put the popular exchange-traded fund tracking the financial sector to the test.
The Financial Select Sector SPDR Fund (XLF) is one of the most highly traded ETFs. Daily volume is often over 100 million shares. The fund follows financial services stock in the S&P 500 index, but has outperformed the S&P so far in 2010 with a 6% return.
The fund is overweighted in large-cap banks: The top five holdings late last week were J.P. Morgan Chase & Co. (JPM), Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C). Together, these stocks account for more than 40% of the portfolio, according to data from State Street Global Advisors, the ETF's sponsor.
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