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Investing in MasterCard through ETFs

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Broad market ETFs hold MasterCard

MasterCard (MA) is widely held by broad market ETFs such as the SPDR S&P 500 ETF Trust (SPY) and the iShares Core S&P 500 ETF (IVV) due to its large market capitalization. SPY seeks to provide investment results that correspond to the performance of the S&P 500 Index. As MasterCard is part of the S&P 500 Index, it forms part of the SPY ETF.

With an expense ratio of 0.07%, IVV’s benchmark index is the S&P 500 Index. MasterCard forms ~0.5% of SPY’s portfolio, as well as IVV’s holdings.

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Financial services ETFs

While MasterCard is primarily a technology company, it basically serves the financial sector and forms a part of the credit services industry. Financial services sector–based ETFs such as the iShares US Financial Services ETF (IYG) and the iShares Dow Jones US Financial ETF (IYF) hold MasterCard. American Express (AXP) and MasterCard form ~3% and ~4% of IYG, respectively. Mastercard forms ~2.2% of IYF.

Technology sector ETFs hold MasterCard

MasterCard forms ~2.2% of the Technology Select Sector SPDR Fund (XLK), which has total net assets of $13.6 billion. XLK has a gross expense ratio of 0.15%, and Visa (V) forms ~3.2% of XLK.

MasterCard stock comprises ~2% of the iShares North American Tech ETF (IGM) portfolio.

Growth-focused ETFs hold MasterCard

MasterCard is considered a growth stock based on its high price-to-earnings ratio, and growth-focused ETFs hold it widely. MasterCard comprises ~1% of the Vanguard Growth ETF (VUG) portfolio.

MasterCard forms ~0.8% of the iShares Russell 1000 Growth ETF (IWF) and ~0.9% of the iShares S&P 500 Growth ETF (IVW). The above graph shows the key ETFs that hold MasterCard, as well as its weight in the respective ETFs’ portfolios.

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