3 ETFs Falter Despite Bank of America’s Q3 Earnings Beat

Big banks are getting off to a good start in third-quarter earnings as Bank of America was the latest to report and posted better-than-expected results. Nonetheless, three exchange-traded funds (ETFs) with the heaviest Bank of America allocations fell at the end Wednesday’s trading session.

Per a CNBC report, the bank’s “net income excluding an impairment charge rose 4% to $7.5 billion, or an adjusted 75 cents a share. When including the $2.1 billion charge tied to the end of a partnership with First Data, net income fell to 56 cents a share, exceeding the 51 cent estimate of analysts surveyed by Refinitiv.

As far as expectations go, analysts forecasted a profit of 51 cents per share and revenue of $22.79 billion, according to IBES data from Refinitiv.

“In a moderately growing economy, we focused on driving those things that are controllable,” CEO Brian Moynihan said in the earnings release. “We made continued strong investments in our capabilities to serve customers, more relationship management teammates, more and refurbished branches and offices, and more digital capabilities, all while core expenses are flat.”

Here are three ETFs with heaviest weightings of Bank of America:

  1. iShares U.S. Financial Services ETF Financials Equities (NYSEArca: IYG): seeks to track the investment results of the Dow Jones U.S. Financial Services Index composed of U.S. equities in the financial services sector. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of the financial services sector of the U.S. equity market.
  2. Financial Select Sector SPDR Fund Financials Equities (NYSEArca: XLF): seeks investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Financial Select Sector Index. The fund generally invests substantially all, but at least 95%, of its total assets in the securities comprising the index. The index includes securities of companies from the following industries: diversified financial services; insurance; banks; capital markets; mortgage real estate investment trusts (“REITs”); consumer finance; and thrifts and mortgage finance.
  3. Invesco KBW Bank ETF Financials Equities (NASDAQ: KBWB): seeks to track the investment results of the KBW Nasdaq Bank Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. The underlying index is a modified-market capitalization-weighted index of companies primarily engaged in U.S. banking activities, as determined by the index provider. The underlying index is designed to track the performance of large national U.S. money centers, regional banks, and thrift institutions that are publicly traded in the U.S.

At the close of Wednesday’s market session, IYG was down 0.16% while XLF and KBWB fell 0.07% and 0.23%, respectively.

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