ETF Trends
ETF Trends

Financial exchange traded funds rose Thursday as strength in Citigroup (NYSE: C) and Bank of America (NYSE: BAC) helped lift the unloved sector.

Shares of Citi, B. of A. and Financial Select Sector SPDR Fund (NYSEArca: XLF) were all fractionally higher in premarket trading.

Citi shares are down about 10% since April 20, and are lagging the banking sector as investors focus on the company’s 10 for 1 reverse split.

“Pressure likely reflects some technical issues surrounding the split, concerns over lack of capital clarity, a so-so capital markets quarter (so far) and concern over a lack of expense flexibility,” Deutsche Bank said in a note Wednesday.

Yet the analysts said the recent sell-off in Citi “seems overdone,” citing valuation, management continuing to de-risk the company, and revenue that may accelerate a bit in the second half of 2011. They kept their buying rating on the stock.

The financial ETF is flat year to date.

Financial Select Sector SPDR Fund

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.