PFI vs XLF

PFIDInvesco Dorsey Wright Financial Momentum ETF

XLFAState Street Financial Select Sector SPDR ETF

In short

PFI Most financials ETFs own the whole sector and let market cap sort it out. PFI runs a momentum screen instead: Dorsey Wright relative-strength rules pick a few dozen financial stocks and reshuffle them every quarter.

XLF The 1998 original. XLF holds the S&P 500's financial sector, roughly 80 banks, insurers, card networks and exchanges, for 0.08% a year. Not the whole sector, the blue-chip end of it, and one of the most heavily traded ways to own it.

Stated mandate

PFI The fund is based on the Dorsey Wright Financials Technical Leaders Index, which is designed to identify companies demonstrating relative strength, or momentum.

XLF The fund seeks to track, before expenses, the price and yield performance of the Financial Select Sector Index.

Why people hold it

• PFI The rulebook is the whole product: at least 30 financial-sector names drawn from the Nasdaq US Benchmark universe on price strength, rebalanced and reconstituted quarterly.nasdaq.comnasdaq.com 2
• Running since 2006, so the strategy has a long public record across rate cycles, the financial crisis and the bank stress that followed. Distributions land quarterly.
• Concentrated by design, a few dozen holdings instead of the full sector, with quarterly resets that can tilt toward banks, insurers, exchanges or payments as leadership shifts.invesco.com

• XLF At 0.08% a year, XLF sits at the cheap end of financial sector funds, well under the 0.44% cohort median and a hair below Vanguard's VFH at 0.09%.
• Trading since December 1998 and heavily traded ever since, so spreads stay tight whether you buy a hundred shares or a hundred thousand.
• Simple plumbing: it owns substantially all the stocks in the Financial Select Sector Index in index proportions, and tracks that benchmark closely.sec.gov
• One of the strongest implementations in the broad financials group on cost, tradability and index fidelity combined.

Worth knowing

• PFI Costs 0.60% net of a waiver through August 31, 2028 (0.78% gross), above the category median and well above plain sector beta such as XLF at 0.08% or VFH at 0.09%.
• A small fund that trades lightly, so spreads can run wider. Limit orders matter more here than with the sector giants.
• Momentum buys strength after it appears, so results can diverge sharply from the broad financials sector in either direction, most of all at turning points.nasdaq.com

• XLF S&P 500 members only, so small and mid-sized regional banks are out. VFH and FNCL cast a wider net across the market-cap range.sec.gov
• About 80 names in one sector: banks, insurers, capital markets and mortgage REITs all bend to the same rate and credit cycle, so swings run wider than a total-market fund.sec.gov
• Cash comes quarterly, not monthly.

Full PFI profile⁠

Full XLF profile⁠