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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.
Additionally, sector ETFs offer convenient 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.97 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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, Citigroup Inc (C - Free Report) accounts for about 7.90% of total assets, followed by Us Bancorp (USB - Free Report) and Wells Fargo & Co (WFC - Free Report) .
The top 10 holdings account for about 59.97% of total assets under management.
Performance and Risk
So far this year, KBWB has lost about -20.67%, and is down about -15.35% in the last one year (as of 09/01/2022). During this past 52-week period, the fund has traded between $50.47 and $75.75.
The ETF has a beta of 1.26 and standard deviation of 39.45% for the trailing three-year period, making it a high risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Bank ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KBWB is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $234.89 million in assets, SPDR S&P Bank ETF has $2.07 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.
Additionally, sector ETFs offer convenient 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.97 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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, Citigroup Inc (C - Free Report) accounts for about 7.90% of total assets, followed by Us Bancorp (USB - Free Report) and Wells Fargo & Co (WFC - Free Report) .
The top 10 holdings account for about 59.97% of total assets under management.
Performance and Risk
So far this year, KBWB has lost about -20.67%, and is down about -15.35% in the last one year (as of 09/01/2022). During this past 52-week period, the fund has traded between $50.47 and $75.75.
The ETF has a beta of 1.26 and standard deviation of 39.45% for the trailing three-year period, making it a high risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco KBW Bank ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KBWB is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $234.89 million in assets, SPDR S&P Bank ETF has $2.07 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.