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ETF News And Commentary

For investors seeking momentum, iShares U.S. Regional Banks ETF (IAT - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up about 38% from its 52-week low price of $28.12/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IAT in Focus    

This ETF offers exposure to small and mid-size U.S. banks with heavy concentration on the top two firms U.S. Bancorp (USB - Free Report) and PNC Financial Services (PNC - Free Report) at 16.8% and 11%, respectively, while other firms hold no more than 7.36% share. While regional banks make up for a substantial portion, diversified banks make up for about 19% share in the basket. The fund charges investors 44 basis points a year in fees (see: all the Financial ETFs here).

Why the Move?

The banking corner of the financial space has been an area to watch lately especially after the surprising victory of Trump in the U.S. presidential election. This is because Trump policies of tamer regulatory environment and lower taxes for hedge fund and private equity managers are incredibly favorable for bankers, giving a boost to the sector.

More Gains Ahead?

Currently, IAT has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook, so it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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