On a related note, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, is another solid performer in the month following a rate increase. Not surprisingly, the SPDR S&P Regional Banking ETF (NYSEArca: KRE) also has a reputation for upside immediately rate hikes.
Related: 3 ETFs for Playing Defense Against a Rising Rate Offense
Higher interest rates would help widen the difference between what banks charge on loans and pay on deposits, which would boost earnings for the financial sector. Regional banks are among the stocks most positively correlated to rising interest rates because higher rates improve net interest margins.
“Shares in the VanEck Vectors Oil Services ETF saw a 6.5 percent boost over the month when rates jumped, while shares of the United States Oil Fund ETF ran up 4.5 percent, according to Kensho. The SPDR S&P Regional Banking ETF is also a top-performer, surging 4.9 percent,” according to CNBC.
For more rising rates strategies, please visit our Rising Rates Channel.