“We believe this is likely unless bond yields move back to a sustainable level above 2 percent,” KBW added.

The financial sector has lagged the broader equities market. Over the past five years, the Financial Select Sector SPDR (NYSEArca: XLF) has returned an average annualized 13.5%, whereas the  SPDR S&P 500 ETF (NYSEArca: SPY) returned 16.4%.

PowerShares KBW High Dividend Yield Financial Portfolio

For more information on the financial sector, visit our financial category.

Max Chen contributed to this article.