Fundamentally speaking, some regional banks, including some found in KRE, are just starting to transition from growth backed by tapping reserves to growth backed by better lending and margins on improving rates. That could be a sign the impact of higher rates is just starting to be felt by regional banks.
However, regional bank stocks and the ETFs that hold them are less volatile and risky than their national counterparts because of a lack of global exposure. Additionally, few if any regional banks have been caught regulatory and legal melodrama on par with the likes of Bank of America and J.P. Morgan Chase (NYSE: JPM). {Regional Bank ETFs Under The Microscope]
SPDR S&P Regional Banking ETF
ETF Trends editorial team contributed to this post.