Here is the Best Bank ETF
Portfolio concentration and weighting strategies set these two banking ETFs apart, shaping their risk and return profiles for investors.
Overview
The Invesco KBW Bank ETF (NASDAQ:KBWB) targets a concentrated selection of large-cap money center institutions, whereas the State Street SPDR S&P Bank ETF (NYSEMKT:KBE) employs an equal-weighted strategy across a broader range of 103 banking stocks.
Investors often turn to the banking sector to express a view on interest rate cycles and the broader health of the U.S. economy. While both funds provide pure-play access to financial services, their construction methods lead to different risk profiles. This comparison looks at how the concentrated cap-weighted approach of one fund differs from the diversified equal-weighted model of the other.
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.