Type: Banking ETF. Others in this category: KBW Bank ETF ( KBE), KBW Regional Banking ETF ( KRE), Merrill Lynch Regional Bank HOLDRs ( RKH) and PowerShares Dynamic Banking Portfolio ( PJB). What it does: IAT tracks the iShares Dow Jones U.S. Select Regional Banks Index, which is composed of small and midsize regional U.S. banks. IAT employs a three-year asset weighting methodology to determine which regional banks will be included in the fund. Who it's for: While regional banks have traditionally offered investors more conservative exposure to the banking industry, many of the large regional banks have been ensnared by the same mortgage difficulties as their large-cap peers. Since IAT has a capitalization-weighted methodology, investors should be mindful that a large portion of the holdings will be held in the largest of the regional banks. IAT's top holding, Fifth Third Bancorp ( FITB) comprises nearly 19% of the portfolio. This concentration makes IAT's investors particularly sensitive to FITB's news and intraday trading patterns. As healthy banks are weeded out from "zombie" banks, IAT could be a good instrument to pick up exposure to regional banks that weather the crisis. Top 10 Holdings: U.S. Bancorp, PNC Financial Services ( PNC), BB&T ( BBT), Northern Trust ( NTRS), Hudson City Bancorp ( HCBK), SunTrust ( STI), Regions Financial ( RF), MT&T Bank ( MTB), Fifth Third Bancorp, New York Community Bancorp ( NYB). Liquidity and fees: IAT has a 0.48% fee. The three-month average daily trading volume is 523,346. Before investing in any financial ETF, you should examine your risk/reward tolerance. When scouting financial ETFs in particular, however, investors should be particularly sensitive to top-heavy portfolios where a single component could sway the entire investment. For an overall large-cap exposure to the sector, XLF might be the best choice for cautious investors just tiptoeing back into financials. PGF and other preferred ETFs offer a more fixed-income approach to financial sector investing, while subsector ETFs like IAT allow investors to pick niches that they believe will flourish.