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How To Invest In US Regional Banks: ETFs

Published 06/04/2015, 01:00 AM
Updated 05/14/2017, 06:45 AM

Regional banks as a sector have performed well in the last 3 months. The main three ETFs in this sector NYSE:IAT, NYSE:KRE, NYSE:KBWR, NASDAQ:QABA. Given that there is a possibility of rising interest rates, regional banks are the pure play for this scenario. These banks are more focused in disbursing loans.

Price Return

When comparing them one a one month price return, KBWR tops the list giving consistent high returns as compared to its peers.

IAT: One month price return

Volatility Analysis

KBWR also is more volatile as compared to the its peers. However, the volatility is not very high as compared to peers.

IAT: Regional Banks - volatility

Relative Valuation

However QABA, takes the high scores with 31.71% of its portfolio invested in stocks with P/B above its peers.

Regional banks - relative valuation

Fudamental Analysis

When comparing on fundamentals:

Regional banks - Fundamental Analysis

IAT is a good pick with average volatility and good Operating Margins.

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