KBWB vs. UYG: Which Financials ETF Is the Better Buy for Investors?
UYG offers leverage -- with higher fees -- while KBWB's traditional banking focus delivered the stronger one-year return.
Overview
Investors choosing between the Invesco KBW Bank ETF (NASDAQ:KBWB) and ProShares Ultra Financials (NYSEMKT:UYG) need to weigh UYG’s 2x daily leverage and higher fees against KBWB’s focused, traditional banking portfolio.
While both funds target the financial sector, they’re designed to play different roles in a portfolio. KBWB tracks a traditional bank index and is built for buy-and-hold exposure, while UYG is a leveraged instrument designed for short-term, tactical trades -- it uses derivatives to try to double the daily performance of its benchmark.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year 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.