How to invest in US Regional Banks – ETFs

Regional banks as a sector have performed well in the last 3 months. The main three ETFs in this sector IAT, KRE, KBWR, QABA. Given that there is a possibility of rising interest rates, regional banks are the pure play  for this scenario. These banks are more focused in disbursing loans.

Price Return

When comparing them one a one month price return, KBWR tops the list giving consistent high returns as compared to its peers.

One month price return

 

Volatility Analysis

KBWR also is more volatile as compared to the its peers. However, the volatility is not very high as compared to peers.

 

Regional Banks - volatility

 

Relative Valuation

However QABA, takes the high scores with 31.71% of its portfolio invested in stocks with P/B above its peers. 

 

Regional banks - relative valuation

 

Fudamental Analysis

when comparing on a fundamentals

Regional banks - Fundamental Analysis

 

IAT is a good pick with average volatility and good Operating Margins.

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