The Top Regional Banking ETF According to Experts

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Semiconductor ETF Searches in the Last Month Rank Ticker Name Searches #1 [KRE]( SPDR S&P Regional Banking ETF 28 #2 [XLF]( Financial Select Sector SPDR Fund 11 #3 [DPST]( Direxion Daily Regional Banks Bull 3X Shares 5 #4 [FAZ]( Direxion Daily Financial Bear 3X Shares 2 #5 [EUFN]( iShares MSCI Europe Financials ETF 1 #ad [Adding Color to the Investment Spectrum]( Brought to you by [Simpler Trading, LLC]( [Discover how Taylor Horton doubled his account in just TWO weeks with 72% wins. What’s his secret?]( [Simpler Trading, LLC - Discover how Taylor Horton doubled his account in just TWO weeks with 72% wins. What’s his secret?]( See the “A+ Setup” driving Taylor’s 72% win rate (even in THIS market). This is your opportunity to reveal how Taylor ONLY trades “A+ Setups” in strong sectors. Want to trade with total confidence? See the live demo for real-time proof. [Watch the Demo]( Pros Pick Their Top 5 Financial ETFs Technology companies led markets higher for the past several years. Lately, we’re seeing signs of a rotation into financial stocks. According to our TrackStar data, financial pros increased their searches for banks in June while decreasing searches for tech companies. Interestingly, the top financial ETF search is the S&P Regional Bank ETF KRE. Folks remember this ETF from the crisis a few years back that took down Silicon Valley Bank. Year-to-date, the stock is down 6.7%. However, it gained almost 4% in the past week. With the Fed poised to cut interest rates in the next year, the KRE could make an interesting trade. Key Facts About SMH - Net assets: $2.7 billion - 12-month trailing yield: 3.23% - Inception: June 19, 2006 - Expense ratio: 0.35% - Number of holdings: 142 The KRE is the market's most well-known and actively traded regional banking ETF. With 142 holdings equally weighted, the ETF focuses on regional banks that are generally limited in geography and have assets between $10 billion and $100 billion. [Top holdings] [Source: State Street]( Many of these banks focus more on local lending, whereas national banks do more wealth management and commercial services. This makes regional banks more sensitive to interest rate changes. And generally speaking, higher rates favor banks because the spread between what they pay depositors and what they lend is greater. However, that paradigm has shifted, with banks being forced to raise deposit rates to lure in cash. So, lower rates would actually benefit regional banks by boosting borrowing activity. Performance The regional banking crisis lopped off a chunk of gains the sector has yet to make back. Thus, it’s only up about 6.4% over the past five years. [Funds] [Source: State Street]( However, individual banks within the sector have fared better, especially those with less exposure to short-term interest rates. Competition We stacked up the KRE against other popular financial ETFs including the XLF to give you a sense of the investment choices out there. - Financial Select Sector SPDR Fund (XLF): The market-cap weighted XLF is the best-known financial sector ETF, holding the largest U.S. financial companies, including banks, payment processors, and insurance companies. - Direxion Daily Regional Banks Bull 3X Shares (DPST): If you’re looking for leveraged exposure to regional banks, the DPST gives you 3x the daily move of the regional banking sector. - Direxion Daily Financial Bear 3X Shares (FAZ): Similar to the DPST, FAZ gives you 3x leverage to the daily moves of the broader financial sector. - iShares MSCI Europe Financials ETF (EUFN): If you’re looking for some international finance, the EUFN is a market-cap weighted ETF holding 81 of the top financial companies in Europe, like UBS and HSBC. [Net assets] The KRE significantly underperforms the broader financial sector in the U.S. and Europe. It also has a slightly higher expense ratio than the broader financial sector ETF. [Elon Musk’s Final Masterpiece: “X-9840”]( The investment legend who predicted the rise of Bitcoin, Facebook and streaming services like Netflix… Just released the details on what he’s calling Elon’s Project X-9840. After revolutionizing the payment processing industry with Paypal… The space exploration industry with SpaceX… And the auto industry with self-driving Teslas… Elon Musk is now set to revolutionize MONEY. And I’m not talking about replacing the US dollar with a digital currency. It’s bigger than that. As Elon said, this could change “your entire financial life.” Elon has said he could flip the switch “as early as mid 2024.” [Click here to see the details because there’s not much time to prepare.]([Ad] Our Opinion 7/10 Relative to the other financial ETFs, the KRE is good but not great. It pays a healthy dividend and provides plenty of liquidity. However, its performance is abysmal, and the equal-weight approach prevents it from gaining any real traction. With lending and finance moving more towards larger institutions, the KRE ETF will keep playing second fiddle to the XLF. 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