ETF Education Report: XLFI

What this ETF is trying to do

The STATE STREET(R) FINANCIAL SELECT SECTOR SPDR(R) PREMIUM INCOME ETF (XLFI) is an exchange-traded fund designed to provide income. It is categorized as an "option income" ETF, which means it uses specific strategies to try and generate cash for investors.

What the numbers show

When looking at an ETF, it is important to separate the share price from the total return.

• Price Return: This measures only how much the share price has changed. For this ETF, the year-to-date (YTD) price return is approximately -6.42%. The one-year price return is approximately -6.71%.

• Total Return: This includes both the price changes and the cash distributions. The YTD total return is approximately 1.54%, and the one-year total return is approximately 4.25%.

To visualize the price change, imagine you had $10,000 invested in this ETF one year ago. Based on the estimated price from roughly one year ago ($24.88) compared to the current price ($23.21), the share price alone has declined.

Income and distribution explanation

This ETF focuses on providing cash to investors. The distribution yield is approximately 11.32%. This means the amount of cash distributed is high relative to the ETF's price. These distributions usually happen monthly, with 12 payments recorded over the last year. Most of these payments have been made on Mondays.

It is important to remember that a high distribution yield does not mean the investor earned that same percentage as a total return. Total return is the most accurate way to see how much value was actually gained or lost.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. While a falling share price does not always mean NAV is eroding, we use an "erosion-risk score" to measure this risk. XLFI has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk, not a guarantee that the fund's value has collapsed.

Top Holdings

The following are the top holdings in this fund (as of October 11, 2026):

• STATE STREET® FINSELSECTSPDR® ETF: 99.94%

• STATE STREET INSTL US GOVT MMKT PREMIER: 0.81%

Pros

• The ETF provides a high distribution yield.

• The one-year total return is positive (4.25%), even though the share price declined.

Cons

• The share price has seen a decline over the last year.

• There is a "mild" erosion-risk score of 75.

Beginner takeaway

When looking at income ETFs like XLFI, high yields can be misleading. An investor should always look at the total return rather than just the distribution yield or the share price alone. The total return shows how the combination of price changes and cash payments actually affected the investment.