One of the leaders in creation activity last week in the ETF realm was SPDR S&P Bank (NYSEArca: KBE), taking in nearly $400 million in new assets.

A related ETF, Financial Select Sector SPDR (NYSEArca: XLF), also had a strong week from an asset flows standpoint, as it saw nearly $300 million flow into the fund. There has been leadership in the Financials, notably Banks, in the first quarter of 2012.

XLF for instance is up 20.92% year to date and KBE has rallied 20.78% versus the S&P 500 Index which has registered an 11.31% gain thus far in 2012.

We believe that the creation activity in these two funds in recent days is a sign of potential “window dressing” where portfolio managers are adding to positions in their “winners” for the quarter, as we have seen a similar occurrence in Tech related ETFs (QQQ and XLK specifically) in recent days as well heading into the last few remaining trading sessions in the first quarter.

Unlike XLF which has exposure to “money center” banks such as JPM and C as well as diversified financials exposure and companies like BRK.B, KBE tracks the S&P Banks Select Industry Index, with top holdings currently being BPOP (3.30%), RF (3.20%), BAC (3.19%), STI (3.05%), and SIVB (2.87%).