Earlier this year, State Street Vice President and Head of Research David Mazza told ETF Trends that “the stocks in KRE have an average beta of +0.44 to moves in the US 10 Year Treasury, meaning that KRE’s holdings have increased 0.44% on average for every 1.00% move in the 10 Year.” [Don’t Forget This Leveraged ETF]
Of course, that scenario cuts both ways. With rates declining this year, investors have pulled nearly $326 million from KRE, but the bulk of those outflows, $263.5 million to be precise, were seen in the first quarter.
Factor in today’s rise and 10-year yields are up 5.5% in just the past week. It is stating the obvious, but if that trend continues the laggard status of the financial services sector would likely be erased with KRE and KBWR regaining their previous leadership roles.
SPDR S&P Regional Banking ETF
