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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.
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 - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $673.77 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 0.39%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.11%.
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, Pnc Financial Services Group Inc (PNC - Free Report) accounts for about 12.73% of total assets, followed by Us Bancorp (USB - Free Report) and Truist Financial Corp (TFC - Free Report) .
The top 10 holdings account for about 61.74% of total assets under management.
Performance and Risk
The ETF return is roughly 0.30% so far this year and is down about -14.21% in the last one year (as of 03/08/2023). In that past 52-week period, it has traded between $45.73 and $62.75.
The ETF has a beta of 1.13 and standard deviation of 40.83% for the trailing three-year period, making it a high risk choice in the space. With about 42 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 $60.74 million in assets, SPDR S&P Regional Banking ETF has $2.29 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.
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 - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $673.77 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 0.39%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.11%.
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, Pnc Financial Services Group Inc (PNC - Free Report) accounts for about 12.73% of total assets, followed by Us Bancorp (USB - Free Report) and Truist Financial Corp (TFC - Free Report) .
The top 10 holdings account for about 61.74% of total assets under management.
Performance and Risk
The ETF return is roughly 0.30% so far this year and is down about -14.21% in the last one year (as of 03/08/2023). In that past 52-week period, it has traded between $45.73 and $62.75.
The ETF has a beta of 1.13 and standard deviation of 40.83% for the trailing three-year period, making it a high risk choice in the space. With about 42 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 $60.74 million in assets, SPDR S&P Regional Banking ETF has $2.29 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.