This is a passive sector ETF that tracks the S&P Global 1200 Financials Index, which is composed of large financial companies in developed markets such as the US, Europe and Canada. It diversifies across the entire financial industry, including banks, insurance, payments and asset management.

It suits investors who want to diversify across the global financial sector as a whole rather than a single country.

It is a passive (index-tracking) ETF managed by iShares.

The fund tracks the S&P Global 1200 Financials Index, which is composed of large developed-market financial companies, using a representative sampling method. It carries a large US weighting but extends its regional reach to Europe, Canada and elsewhere, spreading across the entire financial industry, including banks, insurance, payments and asset management, in proportion to market capitalization.

• Single-ticker exposure to the global financial sector
• Diversification extended beyond the US

Assets under management (AUM) stand at $705.9M, and the total expense ratio (Expense Ratio) is 0.38% per year.

Compared with IXN and IXJ, which belong to the same family of global sector ETFs, and EUFN, a European financials ETF, sector and regional exposure are the main points of comparison.

Financial stocks react sensitively to the interest rate environment and the economic cycle. They tend to be strong when rates rise and the economy expands, and weak when credit concerns grow. Because of its global diversification, the fund tends to soften exposure to financial risk in any single country.

Fund flows into global financial stocks diverge depending on the rate outlook and the stage of the economic cycle, and money sometimes moves into the financial sector when expectations of rising rates build. It is also worth watching that performance can diverge depending on regional financial regulation and economic differences.

Its strength is diversification across the global financial sector, while sensitivity to interest rates and the economy, sector concentration and currency exposure are considerations.

For investors who want to focus only on US financials, direct substitutes include XLF and VFH, and for a narrower focus on the banking industry, products such as KBWB are also worth comparing. The two products shown in the table, IXN and IXJ, are technology and healthcare ETFs from the same global sector family, so their sectors differ, while products such as EUFN are limited to European financials, so their regional exposure differs. This ETF's distinguishing criterion is global diversification that covers the worldwide financial sector in a single ticker.

Here are the points to review before investing in IXG. Global financial diversification is its appeal, but economic sensitivity, sector concentration and currency exposure should be checked in advance. It is also a good idea to compare it with US and European financial products.

Changes in the rate and economic cycle and in the credit environment are the main variables for short-term performance, and because of its concentration in the single financial sector, losses can be large during market crashes. With a large overseas weighting, exchange rate movements also affect returns.

It is a suitable candidate for investors who want to diversify across the global financial sector. Investors who want to focus on US financials should compare products such as XLF and VFH, and those who want worldwide financial diversification should compare this product alongside them before choosing.