XLF shows a price-to-earnings ratio of 14.8 and a price-to-book of 1.2. Meanwhile, the S&P 500 index has a P/E ratio of 17.0 and a P/B of 2.3. KBWB sports an even more compelling discount to U.S. stocks as the ETFs has a P/E ratio of 13.8 and a price-to-book ratio of 1.1. [Value in Bank ETFs]
Although KBWB features ample exposure to the largest U.S. money center banks, investors in the ETF would do well to listen closely to what the Federal Reserve is saying about interest rates. The reason being is that about half of the ETF’s 24 holdings are regional banks and that does not include the super-regionals held by the fund, such as U.S. Bancorp (NYSE: USB) and BB&T (NYSE: BBT).
KBWB has gained $7.7 million of its $237.9 million in assets under management over the past 90 days, according to PowerShares data.
PowerShares KBW Bank Portfolio