Just three of the nine sector SPDR exchange trade funds have traded lower this year. The Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, is one of those three offenders, but that does not mean investors should gloss over financial services ETFs.

XLF is up 1% this month, but that performance does not live up to the ETF’s reputation as historically being the second-best sector SPDR in April when it has averaged a 3% fourth month gain since 1999. However, the financial services sector is seen as fundamentally sound, recent earnings and dividend increases confirm as much, and under-owned by professional investors. And there is the notion that lagging sectors do have the potential to shed their disappointing ways to become leaders. [Sector ETFs for April]

There are some positive signs. For example, the SPDR S&P Bank ETF (NYSEArca: KBE) hit a 52-week on Wednesday.

“We are mindful that if interest rate hikes are genuinely pushed back until 2016, then the risk of a move higher in the S&P 500 is real. And, if so, we would be receptive to financials leading that charge given they have underperformed considerably so far,” said Rareview Macro founder Neil Azous in a note out Thursday.

That makes sense as the financial services sector is the S&P 500’s second-largest sector weight behind technology. Still, doubters might be apt to contest that the Fed delaying a rate hike would pressure some corners of the sector, including rate-sensitive insurance providers and regional banks. Those companies have been longing for higher interest rates after years of dealing with depressed net interest margins.

For what it is worth, the SPDR S&P Regional Banking ETF (NYSEArca: KRE) and the SPDR S&P Insurance ETF (NYSEArca: KIE) have traded higher over the past month. Neither is far off its 52-week high. KRE is just pennies away from a new high. [Bank  on Bank ETFs]

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