Earnings season is right around the corner and we witnessed some interesting options activity in the 9th weighted member of the SPX, JPM (1.23%) yesterday involving June 60 calls in good size.
The stock reports quarterly earnings on 4/14 before the market open and JPM has a strong presence in Financials geared Equity ETFs such as XLF (7.65%, #3 weighted holding) and IYF (5.73%, #3 weighted holding).
Other ETFs which are more sensitive to JPM given higher weightings to the stock are much lesser known than XLF and IYF, which have $17.8 billion and $1.23 billion respectively in AUM include IYG (iShares U.S. Financial Services, Expense Ratio 0.46%) which debuted back in 2000 and has about $580 million in assets under management.
This ETF has a 10.27% weighting to JPM as the stock is the fund’s second largest holding behind WFC (which also reports earnings on 4/14 prior to the market open like JPM). RKH (Market Vectors Bank and Brokerage, Expense Ratio 0.36%) carries a >10.1% weighting to the stock but the fund itself remains rather small at about $15.7 million in AUM. Other funds with notable weightings to JPM are KBWB (PowerShares KBW Bank Portfolio, Expense Ratio 0.35%, $273 million in AUM, 8.14% weighting), RWW (RevenueShares Financials Sector, Expense Ratio 0.49%, $33.9 million in AUM, 7.29% weighting), FNCL (Fidelity MSCI Financials, Expense Ratio 0.12%, $219 million in AUM, 5.92% weighting) and VFH (Vanguard Financials, Expense Ratio 0.12%, $2.55 billion in AUM, 5.46% weighting) to name a few in order of weightings to the stock.
VFH is basically a household name, but KBWB, RWW, and FNCL likely are not, and perhaps should be in increased focus in the near term going into core earnings season for the Banking and Financial sector.