ETF Chart of the Day: Fantastic Financials

Post bank stress tests, U.S. Financials continue to exhibit notable relative strength with benchmark ETF XLF (SPDR Financial Select Sector, Expense Ratio 0.18%) taking in about $1 billion in new assets lately, bringing the total asset base of the fund to about $19 billion.

Top holdings of XLF are of course WFC (8.41%), JPM (8.07%), BRK.B (7.87%), BAC (6.66%), and C (5.57%), with earnings season looming for most of these component stocks (BRK.B on a somewhat unconventional earnings release schedule basically reports mid-quarter).

JPM and WFC are slated to release earnings on 4/11, while C and BAC are scheduled to report on 4/14 and 4/16 respectively. Our eyes are on all related U.S. Financials/Bank ETFs at this point in addition to XLF as well, given that the sector continues to lead in terms of performance.

Two “Bank” specific ETFs have grown to be the second and third largest Financials equity based ETFs in the space currently, KRE (SPDR S&P Regional Banking, Expense Ratio 0.35%) and KBE (SPDR S&P Bank, Expense Ratio 0.35%), with $2.7 and $2.6 billion respectively in assets under management.

Several diversified financials ETFs may also be in play in the short term including VFH (Vanguard Financials, Expense Ratio 0.19%), IYF (iShares Financials, Expense Ratio 0.48%), and FXO (First Trust Financial AlphaDEX, Expense Ratio 0.70%).

Not all financials based equity ETFs are participating in the recent rally in the sector however, as we note that several internationally based financials funds which are likely lesser known, are taking it on the chin year to date, namely FEFN (iShares MSCI Far East Financials Sector, Expense Ratio 0.48%) and CHIX (Global X China Financials, Expense Ratio 0.65%).