Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares US Financials IYF is appropriate as a tactical satellite holding for broad exposure to the U.S. financial-services sector. Unlike many other U.S. equity sectors, the financial-services sector still has never come   Read more 

Bull Case

Despite net-interest-margin pressure in the short term, over the longer term, higher interest rates should help U.S. banks.
Banks also are in general better capitalized than in the past, and capital ratios have been improving.
Banks are well positioned for the future, having done a fine job cutting expenses. Read more 

Bear Case

IYF is more expensive than its peers.
Rates haven't risen fast enough yet to give a boost to banks, and our analysts don't believe that interest-spread revenue at banks will grow anytime soon.
High unemployment could constrain consumers' willingness to borrow and their ability to repay their loans, potentially leading to large loan write-downs. Read more 

Don't Pay Up to Play REITs 
Watch more 

Premium Membership

View all of our analyst reports with a free trial to Morningstar.com Premium.