“Tax reform, assuming Congress passes a measure similar to the proposals being bandied about, also is expected to boost the sector,” according to CNBC. “Bernstein analyst Kevin St. Pierre said a reduction in the corporate income tax rate from the current 35 percent to the 20 percent outlined in the Republican-sponsored plan would boost bank earnings by about 15 percent in 2019 — 21 percent for consumer finance.”
Deregulation could also help the financial sector improve their margins. President Donald Trump has shown its eagerness in cutting back the red tape and remove some of the post-financial crisis regulations that has stifled the industry.
XLF has seen fourth-quarter inflows of $2.1 billion, a sum topped by just five other ETFs.
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