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.