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Should You Invest in the Invesco KBW Bank ETF (KBWB)?
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Looking for broad exposure to the Financials - Banking segment of the equity market? You should consider the Invesco KBW Bank ETF (KBWB - Free Report) , a passively managed exchange traded fund launched on 11/01/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.65 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Banking segment of the equity market. KBWB seeks to match the performance of the KBW Nasdaq Bank index before fees and expenses.
The KBW Nasdaq Bank index is a modified-market capitalization-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly-traded in the US.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Goldman Sachs Group Inc/the (GS - Free Report) accounts for about 8.89% of total assets, followed by Bank Of America Corp (BAC - Free Report) and Morgan Stanley (MS - Free Report) .
The top 10 holdings account for about 62.27% of total assets under management.
Performance and Risk
The ETF has gained about 19.36% and was up about 32.56% so far this year and in the past one year (as of 07/23/2024), respectively. KBWB has traded between $36.74 and $58.74 during this last 52-week period.
The ETF has a beta of 1.18 and standard deviation of 27.15% for the trailing three-year period, making it a high risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Bank ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KBWB is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
First Trust NASDAQ Bank ETF (FTXO - Free Report) tracks Nasdaq US Smart Banks Index and the SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index. First Trust NASDAQ Bank ETF has $110.72 million in assets, SPDR S&P Bank ETF has $1.77 billion. FTXO has an expense ratio of 0.60% and KBE charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Invesco KBW Bank ETF (KBWB)?
Looking for broad exposure to the Financials - Banking segment of the equity market? You should consider the Invesco KBW Bank ETF (KBWB - Free Report) , a passively managed exchange traded fund launched on 11/01/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.65 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Banking segment of the equity market. KBWB seeks to match the performance of the KBW Nasdaq Bank index before fees and expenses.
The KBW Nasdaq Bank index is a modified-market capitalization-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly-traded in the US.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Goldman Sachs Group Inc/the (GS - Free Report) accounts for about 8.89% of total assets, followed by Bank Of America Corp (BAC - Free Report) and Morgan Stanley (MS - Free Report) .
The top 10 holdings account for about 62.27% of total assets under management.
Performance and Risk
The ETF has gained about 19.36% and was up about 32.56% so far this year and in the past one year (as of 07/23/2024), respectively. KBWB has traded between $36.74 and $58.74 during this last 52-week period.
The ETF has a beta of 1.18 and standard deviation of 27.15% for the trailing three-year period, making it a high risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Bank ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KBWB is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
First Trust NASDAQ Bank ETF (FTXO - Free Report) tracks Nasdaq US Smart Banks Index and the SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index. First Trust NASDAQ Bank ETF has $110.72 million in assets, SPDR S&P Bank ETF has $1.77 billion. FTXO has an expense ratio of 0.60% and KBE charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.