Active Financials ETF Holds Sector Earnings Leaders

The T. Rowe Price Financials ETF (TFNS) holds positions in companies expected to drive earnings growth for a sector projected to post 15.1% year-over-year gains in the first quarter, above the 14.6% rate that analysts expected at the start of the quarter, according to a recent FactSet report.

Key Takeaways:

• TFNS holds positions across companies expected to drive 15.1% earnings growth for the sector.
• The fund holds major bank stakes including JPMorgan and Bank of America, plus top insurance contributors.
• FactSet projects insurance at 34% growth and banks at 7% growth, leading the financials sector in the first quarter.

The financials sector is expected to report the third-highest earnings growth rate among all 11 sectors in the first quarter, the FactSet report shows. TFNS holds major positions across the sector’s growth drivers, including large banks reporting this week and insurers expected to post 34% earnings growth, led by the fund’s stakes in Chubb Limited (CB) at 3.09%, Allstate Corp. (ALL) at 1.73%, and Travelers Companies, Inc. (TRV) at 0.41%.

JPMorgan Chase & Co. (JPM) makes up 4.92% of the fund, followed by Bank of America Corp. (BAC) at 4.87% and Goldman Sachs Group, Inc. (GS) at 3.81%, according to ETF Database. FactSet projects 7% earnings growth for the banks industry in the first quarter, with regional banks expected to grow 10% and diversified banks at 7%.

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Capital markets is also projected to post 15% growth, driven by double-digit gains across investment banking, asset management, and financial exchanges, the report shows.

Insurance is leading financials sector growth, with all four sub-industries projected to report gains: reinsurance at 90%, property and casualty insurance at 59%, insurance brokers at 12%, and life and health insurance at 4%, the report shows. FactSet identified Travelers, Allstate, and Chubb as the biggest contributors to insurance earnings growth.

The growth reflects anticipated rate increases for home and auto insurance following winter storms. In addition,  operational expense reductions from AI-driven automation in claims and underwriting functions will also drive gains, according to FactSet.

TFNS Takes Active Approach

TFNS launched in June 2025, and carries a 0.44% expense ratio, ETF Database shows. The fund has attracted $12.9 million in assets and pulled in $1.25 million in net flows over the past month. The financials ETF gained 6.74% over the past month.

The FactSet report noted that equity market volatility in the first quarter could create uneven results for property and casualty insurers with private investment exposure.

FactSet analyst Stewart Johnson wrote that while catastrophic events during the quarter likely increased claims expenses, future underwriting results may benefit if regulators approve rate increases for home and auto businesses following winter storms.

TFNS holds Berkshire Hathaway Inc. Class B (BRK.B) as its top position at 10.09%, followed by Visa Inc. (V) at 6.77% and Mastercard Inc. (MA) at 6.11%, according to the fund’s holdings as of March 24.