Ask TheStreet: So Many ETFs

Another choice is the Vanguard Financials ETF(VFH Quote). This fund tracks the financial stocks in the MSCI U.S. Investable Market 2500 Index.

VFH is more diversified than XLF, with a whopping 548 financial stocks included. And unlike XLF, it allocates assets toward micro-, small- and mid-cap stocks, and that diversification can make it less volatile. It is also a bit less concentrated, with roughly 38% of its assets in the top 10 holdings.

Another product with a slightly different spin is the iShares S&P Global Financials Sector Index Fund(IXG Quote), which tracks the S&P Global Financials Sector Index, a subset of the S&P Global 1200 Index.

This ETF follows about 230 stocks, but unlike other financial-sector ETFs, it has a global focus, with almost 60% of its portfolio made up of foreign holdings.

This adds an additional level of diversification to the ETF, which could also decrease volatility. In addition, this fund is less concentrated than both XLF and VFH, with only a quarter of its assets contained in the top 10 holdings.

Several other ETFs are classified as financial-sector products as well, including (but not limited to) the recently launched PowerShares FTSE RAFI Financials Sector Portfolio (PRFF Quote), the iShares Dow Jones U.S. Financial Sector (IYF Quote) and the streetTRACKS KBW Capital Markets (KCE Quote).

Costs, of course, are another important factor to consider.

ETFs that track domestic, market-cap-weighted indices tend to have similar expense ratios. But when you start tracking indices that include international stocks, less-liquid stocks or use different methodologies to select and weight stocks, you're likely to see higher expense ratios.