Fidelity, State Street ETFs cost the same, but one pays you more

ARTICLE SUMMARY

FNCL offers broader diversification. Fidelity’s FNCL holds nearly 400 financial-sector stocks across large-, mid-, and small-cap companies, while XLF focuses on just 76 S&P 500 financial giants. This gives FNCL exposure to community banks, specialty insurers, and smaller financial firms that XLF excludes.
FNCL has recently delivered higher income and returns. Over the past 12 months, FNCL generated a 1.7% yield versus 1.5% for XLF and produced a 7.4% total return compared to 6.7% for XLF.
Both ETFs are low-cost, but XLF is more concentrated. Each fund charges a 0.08% expense ratio, but XLF allocates about 31% of assets to its top three holdings (Berkshire Hathaway, JPMorgan Chase, and Visa), making it more dependent on a handful of large companies. FNCL’s top three holdings represent roughly 25% of assets.
The choice comes down to diversification vs. concentration. Investors seeking broader exposure across the U.S. financial sector may prefer FNCL, while those wanting a more concentrated bet on the largest financial companies in the S&P 500 may favor XLF.