The 7 Best Bank ETFs for American Bulls

Bank stocks and other financial equities are back in the spotlight again with the dawn of another earnings season.

Over-the-shoulder shot of a transaction between a bank teller and a customer in a retail bank. The teller is wearing a black suit and receiving a check from the tan-suited customer over the b
(Image credit: Getty Images)

Bank stocks and other financial equities are back in the spotlight again with the dawn of another earnings season. And any wind in their sails is sure to be felt by bank ETFs.

The financial sector helps kick off each quarter’s run of earnings reports, starting with majors such as JPMorgan Chase (JPM) and Citigroup (C), then followed by regional banks, insurers and stock brokers. Robust economic activity means more business for banks – more mortgages, auto loans and business loans, as well as spending via personal credit – and that should show up in their quarterly reports.

Another bullish driver: The Federal Reserve has raised the fed funds rate three times in 2018 alone – which in turn is helping lift interest rates – to help keep America’s economy from heating up too much. That is a good problem to have, especially if you hold bank stocks and funds. Rising rates help banks by improving their net interest margin (the spread between what banks pay out in interest on deposits and what they earn in interest from mortgages and other loans). It’s no guarantee – higher rates can also dissuade consumers from taking out loans – but broadly, rising rates are viewed as bullish for banks and other financial stocks.

These seven bank ETFs provide varying ways to gain exposure to any continued growth in the financial sector.

Disclaimer

Data is as of Oct. 11, 2018. Click on ticker-symbol links in each slide for current share prices and more. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.

You can check out his thoughts on the markets (and more) at @KyleWoodley.