The PowerShares KBW Bank Portfolio (KBWB) exchange-traded fund (ETF) has surpassed USD1 billion in assets under management (AUM).
KBWB seeks to track the performance of the KBW Nasdaq Bank Index (BKX), a float-adjusted, modified market-cap weighted index that consists of 24 large publicly traded US. national money centres, regional banks, and thrift institutions.
“Passing the USD1 billion milestone demonstrates the value of KBWB for investors looking for targeted access to the largest US banks,” says Fred Cannon, Global Director of Research at KBW. “Our research shows that banks of varying sizes operate with distinctively different business models, leading to diverse performance and valuation trends. Investors benefit from KBWB’s targeted inclusion of large-cap banks, and as the only true large-cap bank ETF, we are proud to see the fund’s growth since its inception in November 2011.”
Since June, the financial sector significantly outperformed the broader market, resulting in an increased interest in investible financial services products with an estimated USD8.1 billion in inflows from 6 June to 1 December. Over this period, the S&P 500 Financials gained 17.9 per cent while the S&P 500 Index rose 8.8 per cent. The largest banks drove much of the financials’ performance, with KBWB advancing 17.6 per cent.
“We continue to see strong interest in KBWB,” says Dan Draper, Global Head of ETFs at Invesco. “That is likely the result of market optimism toward stronger economic growth, corporate tax reform and higher interest rates, which overall has created an improved outlook for banks.”