March 8, 2021
It feels like rising Treasury yields are taking a bite out of plenty of sectors. Bank stock ETFs aren’t one of them, indicating investors may want to consider exchange traded funds like the
KBWB tracks the widely followed KBW Nasdaq Bank Index.
“The Index is a modified-market capitalization-weighted index of companies primarily engaged in US banking activities. The Index is compiled, maintained and calculated by Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. and is composed of large national US money centers, regional banks and thrift institutions that are publicly traded in the US,” according to Invesco.
With rates still low by historical standards, some market observers believe Treasury yields can continue climbing, potentially benefiting KBWB in the process.
Bank Stock Rally Shows Few Signs of Faltering Soon
Bloomberg 3/5/2021 Felice Maranz
(Bloomberg) Bank stocks are on a tear this year, boosted by reopening optimism as the vaccine rolls out across the U.S.
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Investors are betting that more lending, more deals and more consumer spending are yet to come. The potential for fresh stimulus and infrastructure and other massive projects should lift their shares. Even so, while higher yields in a low-interest-rate environment are good for banks, sharp jumps have rattled global markets this week.
The KBW Bank Index has surged 21% this year as some of the biggest banks like JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. posted double-digit gains.