Several banks recently announced dividend increases and share buybacks, but exchange traded funds (ETFs) investing in the sector have lagged the overall market’s bounce since the middle of March.
The $2 billion SPDR Bank ETF (NYSEArca: KBE) has traded sideways and is near its 50-day moving average.
The Federal Reserve recently gave banks the green light on capital plans following the second round of stress tests. Wells Fargo, J.P. Morgan and other lenders announced dividend hikes. [Dividend Surge Puts Specialized ETFs In Focus.]
The top five holdings in SPDR Bank ETF are J.P. Morgan, Wells Fargo, Bank of America, Citigroup and U.S. Bancorp.
The largest financial ETF is Financial Select Sector SPDR Fund (NYSEArca: XLF) with $8.2 billion in assets. The ETF has failed two attempts since 2010 to break through $17 a share.
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