However, there is another important reason to consider bank stocks and ETFs: Rising profitability. In the case of regional banks, that profitability is expected to be enhanced if the Fed proceeds with boosting borrowing costs later this year.
KRE’s sensitivity to interest rates is well known. The ETF rose just 2% in 2014 after surging 47% in 2013 when yields spiked. KRE’s holdings have an average beta of +0.44 to moves in the US 10 Year Treasury.
SPDR S&P Regional Banking ETF
