FNCL vs IYF: Which ETF Is Better in 2026?
A metric-by-metric comparison of Fidelity MSCI Financials Index ETF (FNCL) and iShares U.S. Financials ETF (IYF) — both Financial funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 29, 2026. ~5 minute read.
The Verdict
FNCL and IYF compete directly — both are Financial funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
FNCL and IYF score almost identically on ETFValuer's model (59.1 vs. 59.1) — the honest answer is that either is a reasonable choice, and the decision comes down to the secondary factors below rather than the headline grade.
Head-to-Head: Every Metric
| FNCL | IYF | |
|---|---|---|
| Category | Financial | Financial |
| Expense ratio | 0.08% | 0.38% |
| Fund size (AUM) | $2.2B | $3.9B |
| Dividend yield | 1.65% | 0.80% |
| 1-year return | +10.04% | +12.29% |
| 3-year return | +74.85% | +80.89% |
| Volatility | 14.94% | 14.65% |
| Max drawdown | -17.29% | -16.60% |
| Sharpe ratio | 0.34 | 0.50 |
| ETFValuer score | 59.1 | 59.1 |
| Grade | C | C |
| Overall rank | #267 | #266 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
FNCL is the cheaper fund, charging 0.08% a year versus 0.38% for IYF — a gap of 0.30 percentage points (about $29.60/year on a $10,000 position) that compounds meaningfully over a multi-decade holding period. See the ETF Fee Calculator for the exact dollar impact at your investment size and horizon.
What IYF's Fees Cost You
IYF charges an expense ratio of 0.38% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, IYF returned +80.89% versus +74.85% for FNCL — a gap of about 6.0 percentage points. On risk, IYF has held up better historically, with a shallower max drawdown (-16.60% vs. -17.29%). IYF currently has the better risk-adjusted return (Sharpe ratio of 0.50 vs. 0.34), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (750 shared trading days), FNCL and IYF show a extremely high correlation of 0.985 — very close substitutes. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.985 | Extremely high — very close substitutes |
| R-squared | 97.0% | 97.0% of FNCL's daily moves are explained by IYF's |
| Tracking error (annualised) | 2.92% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | FNCL +20.26% · IYF +21.90% | IYF ahead by 1.64 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, FNCL finished as much as +1.1 points ahead of IYF at the best extreme and -4.7 points at the worst — a 5.8-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
FNCL and IYF hold 7 of the same companies among their top 10 positions. Those shared names make up 33.9% of FNCL and 41.6% of IYF. That's heavy duplication — owning both largely doubles down on the same companies rather than spreading risk. Most investors should pick one.
| Shared Holding | FNCL Weight | IYF Weight |
|---|---|---|
| JPMorgan Chase & Co | 10.10% | 10.78% |
| Berkshire Hathaway Inc | 7.72% | 10.90% |
| Bank of America Corp | 4.34% | 4.68% |
| Goldman Sachs Group Inc/The | 3.28% | 4.17% |
| Wells Fargo & Co | 3.06% | 3.95% |
| Citigroup Inc | 2.71% | 3.59% |
| Morgan Stanley | 2.68% | 3.50% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean FNCL if…
- You want the lower running cost — 0.08% vs 0.38%, about $30 a year less on a $10,000 position
- Current income matters to you — it yields 1.65% against 0.80%
Lean IYF if…
- You care about return per unit of risk — its Sharpe ratio of 0.50 beats 0.34
- You weight recent results heavily — it returned 80.9% over 3 years against 74.8%
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is FNCL or IYF better?
They're rated almost identically by ETFValuer's model — check the cost and risk sections above for the deciding factor that matters most to you.
Which has the lower expense ratio, FNCL or IYF?
FNCL currently has the lower expense ratio (0.08% vs. 0.38%).
Can I hold both FNCL and IYF?
You can, but there's little point. FNCL and IYF have a daily return correlation of 0.98 over the past 3.0 years, meaning they move almost in lockstep. Holding both roughly doubles a single bet rather than spreading it — pick whichever wins on cost and liquidity and put the money in one place.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.