Banking ETFs: How Do KBWB and FTXO Compare to Each Other?
Portfolio concentration and index strategy set these two banking ETFs apart for investors seeking sector exposure.
Overview
The Invesco KBW Bank ETF (NASDAQ:KBWB) offers a lower-cost entry into the banking sector with higher recent returns, while the First Trust Nasdaq Bank ETF (NASDAQ:FTXO) provides broader diversification.
Both funds target the domestic banking sector but follow different indexing methodologies to capture the industry performance. While the Invesco KBW Bank ETF tracks a market-cap-weighted index of money centers and regional banks, the First Trust Nasdaq Bank ETF uses a “smart” indexing approach focused on liquidity and fundamental factors such as volatility and growth.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.