Due it revenue weighting methodology, RWW is heavy on the banks that are in focus in the wake of the Federal Reserve’s stress tests and head of next week’s results of the Comprehensive Capital Analysis and Review (CCAR) program that will show which banks can boost dividends and buybacks. [ETFs for Rising Bank Dividends]
RWW has a mere 0.18% to Zions Bancorp (NasdaqGS: ZION), the lone bank to fail the stress tests, with the bulk of the ETF’s allocated to money center and regional banks that not only aced the stress tests but appear poised to deliver increased shareholder compensation as well.
RWW charges 0.49% per year, which is well above the fees on some of the most popular cap-weighted financial services ETFs. Still, investors should be penny wise and dollar foolish. Paying an extra 30 basis points or so for RWW has worked over the past year as the ETF is up 28.6%, about 600 basis points better than the average return offered by the three largest cap-weighted bank ETFs.
RevenueShares Financials Sector Fund
