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 regional banks. [These Regional Bank ETFs Aren’t Twins]

Investors are not waiting for the Fed to raise interest rates, which will help regional banks’ net interest margins, before piling into KRE. The ETF has added nearly $120 million in new assets this month after adding $243.4 million in new investments last month. [Investors Flocked to These Sector ETFs in May]

Those inflows are a stark reversal in trend that saw KRE lose $414 million in assets this year through May 18.

KRE Relative Strength vs. S&P 500

Chart Courtesy: Captain John Charts