Regionally Speaking: PowerShares KBW Regional Banking Portfolio
Some investors see regional banks as a good way to participate in the financial services rally, since you don’t risk exposure to Europe. And regional banks have indeed outperformed the big banks year-to-date.
If you’re a believer, the ETF that will do the trick is the PowerShares KBW Regional Banking Portfolio (KBWR), which seeks to replicate the returns of the KBW Regional Banking Index. One of its top three holdings is a favorite bank of mine — SVB Financial (SIVB) — which is based in Silicon Valley and focuses on entrepreneurial companies.
This is an equal weighted, float-adjusted ETF with a total of 50 holdings. Its annual expense ratio is a reasonable 0.35%. Most of the fund’s performance has come in 2013, considering it has gained 17% year-to-date and 29% over the past 52 weeks.
To top it off, KBWR also has a decent 30-day SEC yield of 1.83% — not bad considering the PowerShares KBW Bank Portfolio (KBWB), which holds all the big banks, has a 30-day SEC yield of just 1.62%.