Financial sector exchange traded fund investors should keep an eye on possible new taxes as President Obama preps for his State of the Union speech Tuesday.

Ever since the imposed regulations following the financial crisis, financial sector stocks have underperformed the broader market. The Financial Select Sector SPDR (NYSEArca: XLF) gained an average annualized 11.2% over the past five years, Vanguard Financials ETF (NYSEArca: VFH) rose 11.9% and iShares U.S. Financials ETF (NYSEArca: IYF) added 11.8%. In contrast, the S&P 500 rose an average 14.6% over the last five years.

Financials have been among the worst performing areas of the market year-to-date, with XLF down 5.0%, VFH down 3.9% and IYF down 4.0%. [Lackluster Bank Earnings Could Disappoint Financial ETFs]

A proposed plan to raise $110 billion over the next decade through a new tax on financial companies could continue to stifle growth and further pressure bank lending, reports Jesse Westbrook for Bloomberg.

Specifically, the proposal outlines a seven-basis-point fee on liabilities of the largest banks, investment firms and insurers.

According to the Securities Industry and Financial Markets Association, the tax would be an unnecessary attempt cut risk on Wall Street after financial companies have just come to terms with the 2010 Dodd-Frank Act.

“The tax code is not the place for a broad, new and duplicative financial regulatory regime,” SIFMA President and Chief Executive Officer Kenneth E. Bentsen said in a statement. The “targeted tax increase on America’s most productive financial institutions could have far-reaching, unintended consequences that will curtail economic growth.”

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