Invest in U.S. Banks with This Fund

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

The SPDR S&P Bank ETF (KBE) tracks an equal-weighted index of U.S. banking stocks and generally will invest at least 80% of its total assets in such financial services companies.

The index represents the bank segment of the S&P Total Market Index and comprises the following sub-industries: Asset Management & Custody Banks, Diversified Banks, Regional Banks, Other Diversified Financial Services and Thrifts & Mortgage Finance. The index is also equally weighted at each quarterly rebalancing, which puts giant banks on equal footing with smaller ones (at rebalance at least) and increases the emphasis on smaller firms overall than a market-cap-weighted fund.

KBE fills a niche market by providing exposure to a broad selection of banks in an equal-weighted manner. The ETF has amassed an impressive $4 billion in assets under management. With a 0.35% expense ratio, the fund is relatively inexpensive to hold in relation to other ETFs.


The fund trades around $53-54 and has an attractive 2.23% distribution yield. As the chart above shows, KBE’s share price has grown a whopping 80% over the trailing 12-month period to beat its index’s 21.99% return during the same time. The fund also is up 21.91% so far this year, compared to a gain of 7% for its index.

The top three holdings in the fund, and their percentage of KBE’s assets, are MGIC Investment Corp., 1.65%; Essent Group Ltd., 1.64%; and Wells Fargo & Co., 1.61%. The fund holds a total of 96 equities.

With strong fundamentals and a seasoned management team, this fund is poised to continue growing higher. However, I do urge all interested investors to exercise their own due diligence in deciding whether this fund fits their own individual portfolio goals.

Exclusive  The Bear Market Might Be Over

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor