For investors looking for momentum, iShares U.S. Regional Banks ETF (IAT - Free Report) is probably a suitable pick. The fund just hit a 52-week high — up roughly 34.1% from its 52-week low of $37.26/share.
Does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
IAT in Focus
The underlying 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. The fund charges 42 bps in fees (see all financial ETFs here).
Why the Move?
Steepening yield curve thanks to a Wall Street rally, favorable earnings picture and a value focus pushed bank stocks and the related ETFs higher lately.Since banks borrow money at short-term rates and lend capital at long-term rates, steepening of the yield curve is always a plus for bank ETFs. On Nov 5, the spread between the 10-year and two-year treasury yield stood at 23 percentage points versus 16 percentage points recorded at the start of the year, benefitting bank stocks and ETFs.
More Gains Ahead?
The fund also has a positive weighted alpha of 10.00, which gives cues of further rally.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free>>