State Street Financial Select Sector SPDR ETF

XLF

Market cap $51.3B

The first quarter of 2026 ended with a downpour of volatility as the CBOE Volatility Index (VIX) rose 69%. Nonetheless, Goldman Sachs (GS) reported first-quarter 2026 earnings that outpaced Wall Street expectations though a thick fog of uncertainty still lingers in Q2.

State Street Financial Select Sector SPDR ETF is rated a strong buy, offering targeted exposure to large-cap U.S. financials with three concurrent growth drivers. XLF benefits from investment banking fee resurgence, Wells Fargo's regulatory release, and a softer regulatory environment, all supporting robust sector growth into 2026-2027. Over half of XLF's portfolio is levered to fee-based models and capital market cycles, reducing rate sensitivity and sidestepping regional bank and CRE risks.

Big banks will start releasing their quarterly numbers from next week. Let's delve into the earnings potential of the big six banking companies, which could drive the performance of the sector ahead.

Financial Select Sector SPDR ETF offers broad U.S. financial sector exposure but faces macro headwinds and underperformance versus the S&P 500 in 2026. Deregulation is a near-term catalyst, with proposed rule changes expected to slightly reduce capital requirements for major banks, benefiting XLF's top holdings. Valuation is mixed: XLF trades at a discount to the market (14.75x P/E) but is expensive versus its 10-year average and peers on P/B metrics.

A stunning one-day surge of 40% in Fannie Mae (OTC:FNMA) and a 47% rise in Freddie Mac (OTC:FMCC) stocks has shocked the market, but the real story could be in the overall, untapped opportunity in mortgage- and housing-related exchange-traded funds (ETFs).

The Financial Select Sector SPDR Fund (XLF) edged modestly higher last week.

Long-term investors can typically wait out volatility. However, not everyone is a long-term investor, whether they are nearing retirement or take a more active approach to investing.

If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the State Street Financial Select Sector SPDR ETF (XLF), a passively managed exchange traded fund launched on December 16, 1998.

Global hedge funds sold shares of bank, insurance, fin-tech and trading companies in the week to March 13, making financials the ​most sold stock sector this year, said Goldman Sachs in a ‌note to clients seen by Reuters on Monday.

State Street Financial Select Sector SPDR ETF (XLF) is upgraded from Sell to Hold after underperforming the S&P 500 and experiencing a recent pullback. XLF's technicals show support near $47.28 and resistance around $53, with the ETF trading just above its midpoint between the 52-week low and all-time high. Fundamentally, XLF trades at a forward PE of 17.3; scenario analysis yields a weighted target price of $52.01, only modestly above current levels.