Investors choosing between the iShares U.S. Regional Banks ETF (NYSEMKT:IAT) and Fidelity MSCI Financials Index ETF (NYSEMKT:FNCL) may weigh IAT’s narrow industry concentration and higher yield against FNCL’s broad sector exposure and lower cost.
Both funds provide exposure to the financial sector, but their scopes differ significantly. One targets a specific niche within the banking industry, while the other serves as a broad-market representative for the entire financial industry. This comparison examines how these distinct strategies impact performance, risk, and costs.
Snapshot (cost & size)
Metric | IAT | FNCL |
|---|---|---|
Issuer | iShares | Fidelity |
Expense ratio | 0.38% | 0.08% |
1-yr return (as of June 12, 2026) | 33.40% | 10.20% |
Dividend yield | 2.82% | 1.67% |
Beta | 1.27 | 0.87 |
AUM | $622.3 million | $2.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
FNCL is considerably more affordable, with an expense ratio of 0.08% compared to IAT’s 0.38%. However, IAT provides a higher payout, featuring a trailing-12-month dividend yield of 2.82% versus 1.67% for the Fidelity fund.
Performance & risk comparison
Metric | IAT | FNCL |
|---|---|---|
Max drawdown (5 yr) | (55.50%) | (25.70%) |
Growth of $1,000 over 5 years (total return) | $1,203 | $1,563 |
What’s inside
The Fidelity MSCI Financials Index ETF provides broad exposure across the financial sector, including financial services at 97.%, technology at 2%, and real estate at 1%. It maintains a diversified portfolio of 404 holdings, and its largest positions include JPMorgan Chase & Co. (NYSE:JPM) at 10.04%, Berkshire Hathaway (NYSE:BRKB) at 8.07%, and Visa (NYSE:V) at 6.41%. Launched in 2013, the Fidelity fund has a trailing-12-month dividend of $1.23 per share and aims to replicate the results of the MSCI USA IMI Financials 25/50 Index.
In contrast, the iShares U.S. Regional Banks ETF is entirely concentrated in the financial services sector with a 100% allocation to regional banks. Its top holdings include The PNC Financial Services Group (NYSE:PNC) at 14.66%, U.S. Bancorp (NYSE:USB) at 13.99%, and Truist Financial (NYSE:TFC) at 9.96%. Launched in 2006, the iShares fund manages a more focused portfolio of 31 positions and has paid $1.62 per share over the trailing 12 months. Since IAT limits itself to regional players, it lacks the exposure to insurance and payment processors found in FNCL.
For more guidance on ETF investing, check out the full guide at this link.
