A sound investment process and strong management team underpin iShares US Broker-Dealers&Secs Exchs ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in quality exposure and an underweight in volatility exposure compared with category peers. High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Goldman Sachs

S&P Global

Morgan Stanley

Charles Schwab

Moody's

CME Group

Intercontinental Exchange

Coinbase

Raymond James

Nasdaq

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. iShares US Broker-Dealers&Secs Exchs ETF earns an Above Average Process Pillar rating. The most important driver of the rating is the fund's impressive long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. This fund tracks an index, which also increases its process rating. Historical data, such as Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Dow Jones U.S. Select Investment Services Index composed of U.S. equities in the investment services sector.  The index measures the performance of the investment services sector of the U.S. equity market, as defined by SPDJI. The fund generally will invest at least 80% of its assets in the component securities of its index and in investments that have economic characteristics that are substantially identical to the component securities of its index and may invest up to 20% of its assets in certain futures, options and swap contracts, and cash and cash equivalents. It is non-diversified. 

 The portfolio is overweight in financial services by 16.2 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are technology and consumer cyclical, with technology underweighting the average portfolio by 5.7 percentage points of assets and consumer cyclical similar to the average. The portfolio is positioned across 38 holdings and is relatively concentrated. In particular, 70.6% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 46.6%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 56% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

iShares’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. Experience on the team is abundant, with 18 years of average portfolio management experience. Together, they manage a total of 257 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares U.S. Broker-Dealers & Securities Exchanges ETF

IAI tracks a market-cap-weighted index of investment service providers as well as securities and commodities exchanges.

Bank of America

Citigroup

iShares US Financial Services ETF

JPMorgan Chase & Co

Invesco KBW Bank ETF

Vanguard Financials ETF

Wells Fargo

Financial Select Sector SPDR Fund

While most big banks beat on both lines in the first-quarter earnings season, higher rates may weigh on the financial ETFs over the medium term.

Bank ETFs in Focus on Mixed Q1 Earnings

If you're interested in broad exposure to the Financials - Brokers/ Capital markets segment of the equity market, look no further than the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI), a passively managed exchange traded fund launched on 05/01/2006.

Should You Invest in the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI)?

The financial sector, which accounts for around one--fifth of the S&P 500 Index, had a mixed Q4.

Bank ETFs in Focus on Mixed Q4 Earnings

iShares U.S. Financials ETF

Chances of a broad-based earnings beat are low-to-moderate as several stocks are experiencing a negative ESP.

How Will Bank ETFs Perform in Light of Q4 Earnings?

Broker-Dealer and Exchange stocks have held up well compared to other Financial sector stocks. The iShares U.S. Broker-Dealers & Securities Exchanges ETF tracks the performance of the Dow Jones U.S. Select Investment Services Index. Investing in broker-dealers, securities exchanges, and investment banks can provide exposure to the broader economy and steady revenue streams.

IAI: More A Signal Than An Investment Now

U.S. banking earnings have been an awaited one as investors' view toward the banking sector has dwindled this year.

Bank ETFs in Focus on Upbeat Earnings

Big banks will start releasing their quarterly numbers this week. Chances of a broad-based earnings beat are low-to-moderate as several stocks are experiencing a negative ESP.

How Will Bank ETFs Perform in Q3 Earnings Season?

SPDR S&P Capital Markets ETF

KCE and IAI are two Capital Markets ETFs that have outperformed the broader Financial Services sector over the last 17 years. Expense ratios are 0.35% and 0.39%, respectively. KCE is equal-weighted while IAI is market-cap-weighted and highly concentrated in just a few names, including Morgan Stanley and Goldman Sachs. In years when IAI outperformed, it did so substantially, so long-term investors might prefer IAI. However, I caution that Wall Street analysts are bearish on its constituents.

KCE Vs. IAI: Which Capital Markets ETF Is The Better Buy?

Resilient consumers but a cautious corporate behavior pulled the strings on banking earnings in the second quarter.

Bank ETFs in Focus on Consumer vs Corporate Tug-of-War in Q2

Big banks will start releasing their quarterly numbers this week. Let's find out what's in store for bank ETFs.

How Will Bank ETFs Perform in Light of Q2 Earnings?

The iShares U.S. Broker-Dealers & Securities Exchanges ETF primarily invests in the US financial services industry, focusing on broker-dealers and securities exchanges. The fund's top two holdings, Morgan Stanley and Goldman Sachs, make up 40% of the portfolio and have shown strong historical growth despite macroeconomic headwinds. IAI offers attractive dividends and consistent dividend growth, making it a stable investment option, especially in a rising interest rate environment.

IAI: An Attractive Option In A High Interest Rate Environment

UBS ETRACS Wells Fargo Business Development Cmpn Indx ETN 2015-26.4.41 Lkd to Wells Fargo Business Dvlpmnt Indx Ser B

VanEck Vectors BDC Income ETF

Davis Select Financial ETF

Direxion Daily Regional Banks Bull 3X Shares

iShares MSCI Europe Financials ETF

Fidelity MSCI Financials Index ETF

First Trust Nasdaq Bank ETF

First Trust Financials AlphaDEX Fund

iShares U.S. Insurance ETF

iShares U.S. Regional Banks ETF

iShares Global Financials ETF

SPDR S&P Bank ETF

Invesco KBW High Dividend Yield Financial ETF

Invesco KBW Property & Casualty Insurance ETF

Invesco KBW Regional Banking ETF

SPDR S&P Insurance ETF

SPDR S&P Regional Banking ETF

Invesco DWA Financial Momentum ETF

Invesco S&P SmallCap Financials ETF

First Trust NASDAQ ABA Community Bank Index Fund

Lipper Financial Services ETFs recorded their largest weekly outflow of the year over the past fund flows week (-$1.4 billion). On top of the bank failures, market participants are worried about the largest U.S. banks gaining an increasing market share by allowing them to take over the smaller regional institutions.

Regional Banking Concerns Produce Financial Services ETF Outflows

VettaFi's vice chairman Tom Lydon discussed the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” While broker-dealers and security exchanges might not be the hot business of the moment, they present a unique opportunity coming off the banking turmoil.

ETF of the Week: iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI)

God Bless America ETF

Charles Schwab Corporation reported strong Q1 2023 earnings, surpassing earnings expectations and driving up its stock price. However, the top line missed estimates.

Should You Tap Charles Schwab's Q1 Earnings With ETFs?

Big banks will start releasing their quarterly numbers this week. The outlook is moderate this time.

How Are Bank ETFs Shaped Before Q1 Earnings?

Three out of six big U.S. banks were able to beat overall this earnings season.

Financial ETFs Down on Mixed Earnings

The US Capital Markets Sector may be a leading indicator of the real economy. IAI is an ETF that gives exposure to this theme. I believe the two most important monitorable that would influence the outlook of IAI are interest rates and the VIX.

IAI: Betting On U.S. Capital Markets Activity (Technical Analysis)

Only five out of six big U.S. banks were able to beat overall in the latest earnings season.

Financial ETFs Up on Upbeat Earnings

Big banks will start releasing their quarterly numbers from this week. The outlook is bearish this time thanks to the flattening of the yield curve.

How Will Bank ETFs Perform in Light of Q3 Earnings?

SPDR S&P 500 ETF Trust

The latest bouts of data indicate that economic growth is improving, resulting in an upside for the financial sector.

5 Financial ETFs Outperforming the Market

U.S. banks have outperformed the S&P 500 past month. More rally ahead?

Time for Bank ETFs on Decent fundamentals?

Only two out of six big U.S. banks was able to beat overall this earnings season.

Banking Earnings Downbeat: What's in Store for ETFs?

Big banks will start releasing their quarterly numbers from this week.

What's in Store for Bank ETFs This Earnings Season?

Many analysts are of the view that U.S. banks are better-prepared for a likely recession. Banks are great bargains now.

Time for Bank ETFs on Cheaper Valuation & Decent fundamentals?

U.S. banking biggies have cleared the key Stress Test successfully and some of them have hiked dividends soon after the release of the test result.

News for iShares U.S. Broker-Dealers & Securities Exchanges ETF ETF (IAI)