Financial Sector review using XLF, FINX and ARKF

With interest rates rising one would expect the financial sector to do relatively better than some of the other sectors. I am long XLF through call options as of this writing. There are 3 instruments that I track within the financial sector, and I wanted to check their relative performance to each other.

Am I using the right instrument, or I could do better? Below is the trending heat map for the 3 instruments.

Trending Heat Map

As we can see there is no difference in the 3 of them. All 3 are trending short-term bullish and all 3 of them have their current trading price above the 50-day moving average as well.

ROI

The return-on-investment analysis tells a different story. This is the 3-month ROI below:

All 3 are negative returns. However, XLF is much less negative than FINX and ARKG.

Over the last 1 month, the difference is even more stark:

XLF +2.4%

FINX -1.4%

ARKF -6.1%

Year-to-date ROI

XLF -15.49%

FINX -43.54%

ARKF -56.72%

I will not get into what each of these instruments is backed with. Although, the XLF is the traditional financial sector instrument, the FINX is the FinTech representation and the ARKF is the actively managed FinTech by ARK investments.

I am of course only looking at this year’s performance. To be fair, all innovation sectors (FINX and ARKF would be considered under innovation) have performed poorly this year.

However, (and you know what is coming), the 2-year returns are very similar. In fact, there is a stark contrast to the returns.

XLF +37.33

FINX -36.84

ARKF -51.24%