10 Best Stocks for 2014: Financial SPDR (XLF)
Investors: John Jagerson and Wade Hansen
While the last two 10 Best Stocks for 2014 entrants were individual stocks from the financial sector, John Jagerson and Wade Hansen decided to make a broader bet on financials via the Financial SPDR (XLF), a financial ETF from State Street Global Advisors.
As Greg Harmon and Bryan Perry also noted, Jagerson and Hansen believe quantitative easing from the Fed could result in a strong year for financials thanks to improvements in net interest margins. Toss in general economic growth and increased dividends after 2014 stress tests, and you have a blueprint for success.
Of course, there are lots of options when it comes to a financial ETF, but these two chose the XLF for their 10 Best Stocks of 2014 entry for one simple reason: It’s the cheapest. The iShares U.S. Financials ETF (IYF) has an expense ratio of 0.45%, while the RevenueShares Financials Sector Fund (RWW) has an expense ratio of 0.49%. The Financial SPDR, meanwhile, charges a mere 0.18%.
That’s good enough for a spot in our 10 Best Stocks for 2014 contest … and hopefully good enough for a strong performance.