KBE uses an equal weight approach and of those three aforementioned stocks, only Wells Fargo appears in the ETF’s top-10 holdings. Fundamentally, KBE has been strong as the ETF has benefited from positive results from the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR), which allowed for enhanced shareholder rewards plans. All but one of KBE’s holdings that were subjected to the Fed’s stress tests passed. [Higher Interest Rates Could Support Bank ETFs]
Still, investors should keep close watch on KBE’s chart.
“March and April highs for the ETF took place at a nearly perfect 50% retracement of the 2007-2009 bear market. The market does keep tabs of inflection points such as this, even though their influence is not obvious to short-term traders. They often mark the spot from which changes begin,” according to Barron’s.
SPDR S&P Bank ETF
