However, 2012 looks to be a better year for bank ETFs, as long as the Eurozone debt crisis doesn’t blow up and require emergency financial assistance for banks.
“The U.S. has not slipped back into recession, and employment and manufacturing statistics are showing strength. Japan appears to be recovering well from last year’s events, and Asian tech and auto supply chains are up to speed supplying U.S. factories and consumers,” S&P said.
“Stability is evident almost everywhere, in sharp contrast to last year. The ‘green shoots’ of 2009, which promised so much and delivered so little, may now be for real. That would provide solid support for bank lending, interest rate spreads and capital cushions,” Oja wrote. “Also, the U.S. federal government tug-of-war between a president who was elected with a large mandate in 2008 and a Congress elected in 2010 to stop presidential over-reach, has settled into what seems like an armed standoff, not a good situation, but at least one that is stable.”
S&P recommends iShares Dow Jones US Regional Banks (NYSEArca: IAT) and SPDR S&P Regional Banking ETF to get exposure to the sector. The ETFs’ holdings include PNC, Fifth Third, BB&T, SunTrust and Regions Financial.
iShares Dow Jones US Regional Banks
