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Monday, June 8, 2015

ETF recommendation: Financial Sector XLF

ETF recommendation: Financial Sector XLF

XLF is a fund that provide a low cost approach to invest in a portfolio of stocks that represent the financial sector index.

The market crash in 2008 become the huge stock fall in all sectors including Financial, Medical Care and Utilities.
The most affected was the financial sector because the bank home loans was the main factor of the economic crisis.

The sector is growing at a slow rate due to many factors like the FED rate unchanged, the weak dolar and the multi million legal claims suffered by banks and financial institutions.

We think there is an opportunity in the sector right now and a possibility to recover the prices.
The sector is far away from the highs previous to the 2008 financial crisis.

The main components of the XLF fund are: 

Citigroup Inc. C
Bank of America Corp. BAC
JPMorgan Chase & Co. JPM
Wells Fargo & Co. WFC
Morgan Stanley MS
Berkshire Hathaway Inc. Cl B BRK.B
American International Group Inc. AIG
American Express Co. AXP

The ETF has not a significant trend line since 2011 but we expect a movement to follow a bull trend line in the next months.
We see a target price of $28 with a profit margin of around 12.5% in the short time.
The ETF is actually trading around $25, the RSI is still low at 54.28 and a volume below the average of 30.439.739.

Investment Information

YTD return: 0.11%
5 yr avg return: 13.52%
Market Cap: 18.20B
Net Assets: 18.10B
NAV: 24.64
Shares Outstanding: 733.80M
Avg Daily Vol: 25.83M
Dividend Yield: 1.46%
Dividend: 0.09
Ex Dividend Date: 03/20/15

52 week low: $21.55
52 week high:$25.14

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