Investors, though, should still brace for a potential stress test failure. For instance, Bank of America stated that regulators demanded changes to some of its models, and Goldman Sachs (NYSE: GS) came close to failing its initial test last week. GS makes up 2.5% of XLF. [Bank ETFs Strengthen on Passing First Round Stress Tests]

However, Citigroup (NYSE: C) is expected to expand its dividend payouts as many anticipated the bank to have made drastic changes after failing its test on qualitative grounds last year. C makes up 5.3% of XLF.

Financial Select Sector SPDR

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

Full disclosure: Tom Lydon’s clients own shares of IYF.