The sensitivity of insurance ETFs and their holdings to Treasury yields will continue to figure prominently in the funds’ near-term performance. The reason: Insurance companies make profit from spreads between what they owe policyholders and bond yields. The higher the Treasury yield, the better for insurance providers. [Insurance ETFs Wait on Higher Rates]
Small banks have been left relatively unscathed by the recent bout of litigation fees and regulatory fines levied onto the larger banks. An improving U.S. economy could foster increased borrowing and financing by businesses, large and small, across the U.S. while benign mortgage rates could also provide a lift to the mortgage lending operations of community and regional banks.
Investors have allocated $2.14 million to PSCF over the past month, according to PowerShares data.
PowerShares S&P SmallCap Financials Portfolio
