Of the three main regional bank ETFs, only the PowerShares KBW Regional Banking Portfolio (NYSEArca: KBWR) finished higher Wednesday, but KBWR closed near its low of the day. The iShares U.S. Regional Banks ETF (NYSEArca: IAT) lost 0.26% on the day.
If the Fed’s no tapering pledge flattens the yield curve, regional banks could be vulnerable because flatter yield curves reduce the spreads at which regionals can borrow and lend, adversely affecting profits in the process.
SPDR S&P Regional Bank ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of KRE.