“In our view, the key to unlocking appetite for loan growth may be less about marketing (as was the case pre-recession) and more about consumer confidence, home values, the ability to sell a home, having a job that pays more than the bills, and having job options,” Parechanian added.
The S&P analysts have an “overweight” rating on two ETFs that focused on consumer finance companies, including the iShares Dow Jones US Financial Sector Index Fund (NYSEArca: IYF) and iShares Dow Jones US Financial Services Index Fund (NYSEArca: IYG). Both funds have an expense ratio of 0.47%. [Energy, Financial ETFs Cheapest Sectors Amid Multiyear Highs]
The IYG ETF is 100% equity while the IYF ETF is 76% domestic equity, 4% international equity and 20% real estate. Both funds have significant exposure to JP Morgan Chase, Wells Fargo, Citigroup, Bank of America, Visa Inc, Goldman Saches Group, U.S. Bancrop and American Express. However, IYG is more top heaving, with its top 10 holdings accounting for 60% of the ETF’s portfolio, whereas IYF’s top 10 holdings make up 39% of assets. [Financial ETF Focus: Banks and Brokers]
For more more information on the financials sector, visit our financial category.
Max Chen contributed to this article.