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Community Bank ETF (QABA) Hits a 52-Week High

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For investors looking for momentum, First Trust NASDAQ ABA Community Bank Index Fund (QABA - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up about 95% from its 52-week low price of $27.44/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

QABA in Focus

The underlying NASDAQ OMX ABA Community Bank Index is a market capitalization-weighted index. The Index includes a subset of banks and thrifts or their holding companies listed on NASDAQ. It has AUM of $101.9 million and charges 60 basis points in annual fees (see all Financials ETFs here).

Why the Move?

Banks have been a beneficiary of the current jump in long term interest rates.As banks seek to borrow money at short-term rates and lend at long-term rates, a steepening yield curve will earn more on lending and pay less on deposits, thereby leading to a wider spread. This will expand net margins and increase banks’ profits.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 47.18, which gives cues of further rally. However, the fund has a Zacks Rank #3 (Hold).

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