×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: banking investments | exchange-traded funds

Bank-Focused ETFs See Strongest Demand in Months

Bank-Focused ETFs See Strongest Demand in Months
(Dreamstime)

Friday, 31 March 2023 01:28 PM EDT

March recorded the worst U.S. bank failures since the 2008 crisis, but that did not stop some investors from snapping up battered financial stocks to bolster their bets on the sector's long-term health, fund-flow data showed.

Exchange-traded funds tracking U.S. regional banks saw their strongest net inflows in months, with the SPDR S&P Regional Banking ETF receiving $1.25 billion in the month to March 29, while the iShares U.S. Regional Banks ETF took in $258 million, according to Refinitiv Lipper data.

March was the first month of net buying for the IAT fund in a year, and one of the best months on record in terms of flows for KRE.

That's despite both funds plunging about 29% in March as the collapse of Silicon Valley Bank and Signature Bank triggered fears of a contagion and doubts about the sector's stability, making U.S. regional banks among the worst-performing sectors this year.

"A lot of investors are assuming that the worst of the volatility has cooled at this point and taking advantage of those lower prices," said Roxanna Islam, head of sector and industry research at VettaFi.

A swift response from regulators and central banks encouraged investors looking to "buy at the bottom," Islam said.

Investors also eyed funds tracking larger banks assumed to be more stable, with the SPDR S&P Bank ETF taking in nearly $79 million in March, its first month of net buying since October.

"Bank equities are already pricing in a lot of bad news," said John Tierney, strategist at MacroHive, recommending increased allocations to big banks including JPMorgan Chase & Co and Citigroup.

"As markets continue to settle down ... banks generally and major banks especially will outperform the S&P 500."

Overall prices for these funds recovered slightly over the past week as banking sector worries eased, but the KBE fund is set to drop 23% for the month, its worst since COVID-19 lockdowns roiled markets two years ago. The S&P 500 rose 2.5%.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
March recorded the worst U.S. bank failures since the 2008 crisis, but that did not stop some investors from snapping up battered financial stocks to bolster their bets on the sector's long-term health, fund-flow data showed.
banking investments, exchange-traded funds
327
2023-28-31
Friday, 31 March 2023 01:28 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved