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Should You Invest in the iShares U.S. Regional Banks ETF (IAT)?
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The iShares U.S. Regional Banks ETF (IAT - Free Report) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Regional Banks segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $713.93 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Regional Banks segment of the equity market. IAT seeks to match the performance of the Dow Jones U.S. Select Regional Banks Index before fees and expenses.
The Dow Jones U.S. Select Regional Banks Index is a free-float adjusted market capitalization-weighted index which measures the performance of the regional bank sub-sector of the U.S. equity market.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.66%.
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, Us Bancorp (USB - Free Report) accounts for about 14.96% of total assets, followed by Pnc Financial Services Group Inc (PNC - Free Report) and Truist Financial Corp (TFC - Free Report) .
The top 10 holdings account for about 67.34% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Regional Banks ETF has lost about -2.77% so far, and is down about -16.26% over the last 12 months (as of 01/15/2024). IAT has traded between $29.75 and $53.61 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 31.20% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Regional Banks ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IAT, then, is not a great choice for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
Invesco KBW Regional Banking ETF (KBWR - Free Report) tracks KBW Nasdaq Regional Banking Index and the SPDR S&P Regional Banking ETF (KRE - Free Report) tracks S&P Regional Banks Select Industry Index. Invesco KBW Regional Banking ETF has $65.90 million in assets, SPDR S&P Regional Banking ETF has $3.72 billion. KBWR has an expense ratio of 0.35% and KRE 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 iShares U.S. Regional Banks ETF (IAT)?
The iShares U.S. Regional Banks ETF (IAT - Free Report) was launched on 05/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Regional Banks segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $713.93 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Regional Banks segment of the equity market. IAT seeks to match the performance of the Dow Jones U.S. Select Regional Banks Index before fees and expenses.
The Dow Jones U.S. Select Regional Banks Index is a free-float adjusted market capitalization-weighted index which measures the performance of the regional bank sub-sector of the U.S. equity market.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.66%.
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, Us Bancorp (USB - Free Report) accounts for about 14.96% of total assets, followed by Pnc Financial Services Group Inc (PNC - Free Report) and Truist Financial Corp (TFC - Free Report) .
The top 10 holdings account for about 67.34% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Regional Banks ETF has lost about -2.77% so far, and is down about -16.26% over the last 12 months (as of 01/15/2024). IAT has traded between $29.75 and $53.61 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 31.20% for the trailing three-year period, making it a high risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Regional Banks ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IAT, then, is not a great choice for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
Invesco KBW Regional Banking ETF (KBWR - Free Report) tracks KBW Nasdaq Regional Banking Index and the SPDR S&P Regional Banking ETF (KRE - Free Report) tracks S&P Regional Banks Select Industry Index. Invesco KBW Regional Banking ETF has $65.90 million in assets, SPDR S&P Regional Banking ETF has $3.72 billion. KBWR has an expense ratio of 0.35% and KRE 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.