Should You Invest in the Invesco KBW Bank ETF (KBWB)?

Designed to provide broad exposure to the Financials - Banking segment of the equity market, the Invesco KBW Bank ETF (KBWB) is a passively managed exchange traded fund launched on 11/01/2011.Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $3.41 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Banking segment of the equity market. KBWB seeks to match the performance of the KBW Nasdaq Bank index before fees and expenses.The KBW Nasdaq Bank index is a modified-market capitalization-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly-traded in the US.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 2.27%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.Looking at individual holdings, Jpmorgan Chase & Co (JPM) accounts for about 8.31% of total assets, followed by Bank Of America Corp (BAC) and Morgan Stanley (MS).The top 10 holdings account for about 61.71% of total assets under management.Performance and RiskThe ETF has added roughly 8.46% and was up about 46.68% so far this year and in the past one year (as of 01/29/2025), respectively. KBWB has traded between $47.46 and $71.33 during this last 52-week period.The ETF has a beta of 1.18 and standard deviation of 27.30% for the trailing three-year period, making it a high risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.AlternativesInvesco KBW Bank ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KBWB is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.First Trust NASDAQ Bank ETF (FTXO) tracks Nasdaq US Smart Banks Index and the SPDR S&P Bank ETF (KBE) tracks S&P Banks Select Industry Index. First Trust NASDAQ Bank ETF has $225.52 million in assets, SPDR S&P Bank ETF has $2.56 billion. FTXO has an expense ratio of 0.60% and KBE charges 0.35%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco KBW Bank ETF (KBWB): ETF Research Reports Bank of America Corporation (BAC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report SPDR S&P Bank ETF (KBE): ETF Research Reports First Trust NASDAQ Bank ETF (FTXO): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks