Top Financials ETFs Poised To Rally Further

February 03, 2017

Leveraged & Industry Funds

Also on the list of the 10 largest financials ETFs are two leveraged products, the Direxion Daily Financial Bull 3x Shares (FAS) and the ProShares Ultra Financials (UYG). FAS provides 3x leveraged exposure to the large-cap Russell 100 Financial Services Index, while UYG provides 2x leveraged exposure to the broader Dow Jones U.S. Financials Index.

As always, buyers of leveraged products should be mindful of the impact of daily rebalancing on returns.

The last three of the big financial ETFs target specific industries or subindustries within the sector. The SPDR S&P Bank ETF (KBE) and the SPDR S&P Insurance ETF (KIE) own stocks within the banks and insurance industries, respectively. They both equal-weight their holdings.

Likewise, the SDPR S&P Regional Banking ETF (KRE) holds an equal-weighted basket of stocks within the regional banking subindustry.

Funds like KBE, KIE and KRE are designed for investors looking to take a more targeted approach to investing in financials. That can sometimes pay off―KBE and KRE were among the top-performing financial ETFs since the election, with returns of more than 25%, as investors reasoned that banks will be some of the biggest beneficiaries in the post-Trump world.

For a full list of the top 10 financial ETF winners since the Nov. 8 election, see the table below:

Ticker Fund Expense Ratio AUM Return (%)
FINU  ProShares UltraPro Financial Select Sector 0.95% $22.65M 58.18
KRU  ProShares Ultra S&P Regional Banking 0.95% $12.02M 57.36
FAS  Direxion Daily Financial Bull 3x Shares 0.96% $1.34B 38.53
UYG  ProShares Ultra Financials 0.95% $799.45M 26.37
KRE  SPDR S&P Regional Banking ETF 0.35% $3.62B 26.2
KBE  SPDR S&P Bank ETF 0.35% $3.09B 25.03
IAT  iShares U.S. Regional Banks ETF 0.44% $671.04M 24.38
KBWR  PowerShares KBW Regional Banking Portfolio 0.35% $253.65M 24.36
QABA  First Trust Nasdaq ABA Community Bank Index Fund 0.60% $442.90M 23.89
FTXO  First Trust Nasdaq Bank ETF 0.60% $15.77M 23.59

 

At the time of writing, the author did not own any of the securities mentioned. Contact Sumit Roy at [email protected].

 

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