Small Bank, Financial ETFs Could Capitalize on Looser Regulations | Page 2 of 2 | ETF Trends

In contrast, large Wall Street banks are up against greater scrutiny. For instance, President Barack Obama proposed new fees for the large financial institutions in the latest 2016 budget. [New Tax Proposal Targets Financial Sector, ETFs]

“The environment is only getting worse for the biggest banks,” Isaac Boltanksy, a policy analyst with Compass Point Research & Trading LLC, said in the article. “The community guys are going to get the biggest benefit of policy changes in 2015.”

Additionally, investors who want to target the small-cap category in the financial space but still want some steady exposure to slightly larger companies can also consider equal-weight index-based ETFs as well. For example, the SPDR S&P Bank ETF (NYSEArca: KBE) includes a 7.9% tilt toward mega-caps, 6.5% to large-caps, 41.4% to mid-caps and 44.2% to small-caps, and the SPDR S&P Regional Banking ETF (NYSEArca: KRE) leans more toward small-caps at 53.7%, along with mid-caps 28.5%, micro-caps 13.5% and large-caps 4.3%.

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

Max Chen contributed to this article.