“Despite higher interest rates, we also anticipate a pickup in loan growth as economic activity accelerates,” BlackRock said.
Investors can focus on bank stocks through SPDR S&P Regional Banking ETF (NYSEArca: KRE), iShares U.S. Regional Banks ETF (NYSEArca: IAT), PowerShares KBW Bank Portfolio (NYSEArca: KBWB) and SPDR S&P Bank ETF (NYSEArca: KBE).
The broad financial ETFs also have large positions in bank stocks. For example, banks make up 37.3% of XLF, 32.3% of IYF and 40.8% of VFH.
Moreover, long-term investors may find that financial stocks have exhibited a history of above-average rates of dividend growth. XLF has a 1.65% 12-month yield, IYF has a 1.45% 12-month yield and VFH has a 1.77% 12-month yield.
For more information on the financial sector, visit our financial category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of IYF.