The $1.8 billion KRE does not allocate more than 1.34% of its weight to any of its 89 holdings. On the other hand, the $552.5 million IAT devotes 31.4% of its combined weight to US Bancorp (NYSE: USB) and PNC Financial (NYSE: PNC).
That brings up another point: It is not a stretch to say investors, unless they are bank stock nuts or live in the states where KRE’s holdings operate, have not heard of many of KRE’s holdings. Conversely, several of IAT’s marquee holdings, such as US Bancorp, PNC and BB&T (NYSE: BBT), are better classified as super regional, not regional banks. [Bank on Bank ETFs]
The Fed has not boosted rates yet, but 10-year Treasury yields are rising and that is giving investors an idea of where to be with regional bank ETFs. KRE is up 2.2% year-to-date, an advantage of 50 basis points over 1.7%.
SPDR S&P Regional Banking ETF