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The iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Brokers/ Capital markets segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Brokers/ Capital markets is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.47 billion, making it one of the average sized ETFs attempting to match the performance of the Financials - Brokers/ Capital markets segment of the equity market. IAI seeks to match the performance of the Dow Jones U.S. Select Investment Services Index before fees and expenses.
The Dow Jones U.S. Select Investment Services Index measures the performance of the investment services sector of the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.12%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Goldman Sachs Group Inc (GS) accounts for about 14.72% of total assets, followed by S&p Global Inc (SPGI) and Morgan Stanley (MS).
The top 10 holdings account for about 72.02% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Broker-Dealers & Securities Exchanges ETF has gained about 1.31% so far, and was up about 29.37% over the last 12 months (as of 03/25/2025). IAI has traded between $109.70 and $159.30 in this past 52-week period.
The ETF has a beta of 1.15 and standard deviation of 20.28% for the trailing three-year period, making it a high risk choice in the space. With about 38 holdings, it has more concentrated exposure than peers.