As Falls Silicon Valley Bank, So Falls Banking Stocks

Stocks, particularly banking stocks, fell Friday as regulators took control of Silicon Valley Bank. The Federal Deposit Insurance Corp. announced that Silicon Valley Bank was closed today by the California Department of Financial Protection and Innovation. The FDIC has been appointed as receiver.

Following the failure of SVB, the Dow Jones Industrial Average dropped for the fourth day in a row, ending Friday 345.22 points lower, or 1.07%. The S&P 500 fell 1.45%, while the tech-heavy Nasdaq Composite declined 1.76%. The major stock indexes all ended the week down, with the DJIA falling 4.44%, its worst weekly performance since June. Meanwhile, the S&P declined 4.55%, while the Nasdaq dropped 4.71%.

The fall of SVB marked the biggest bank failure since the global financial crisis and reverberated through the banking sector, with multiple bank stocks such as First Republic, PacWest, and Signature Bank repeatedly halting on Friday.

“The collapse of SVB, a key player in the tech and venture capital community, leaves companies and wealthy individuals largely unsure of what will happen to their money,” wrote CNBC’s Jesse Pound. “SVB was a major bank for venture-backed companies, which were already under pressure due to higher interest rates and a slowdown for initial public offerings that made it more difficult to raise additional cash.”

But Gina Bolvin, president of Bolvin Wealth Management, is quoted in CNBC as saying that the selloff in bank shares this week could create an opportunity for investors, saying: “Right now we’re neutral on financials, but, as they get cheaper, and as they’re selling off, there may be an opportunity to invest in some of the larger, more quality banks.”

For investors worried about continued volatility who want to take advantage of the opportunities that could spring up in this disrupted sector (and others), T. Rowe Price offers a suite of actively managed equity ETFs that could be worth looking into, such as the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).

In uncertain markets, active managers with a proven track record can help navigate investors through potential choppiness. T. Rowe Price has been in the investing business for over 80 years, conducting field research firsthand with companies, utilizing risk management, and employing a team of experienced portfolio managers carrying an average of 22 years of experience.

For more news, information, and strategy, visit the Active ETF Channel.