Down an average of 8 percent year-to-date, the SPDR KBW Regional Banking (ETF) (NYSE: KRE) and the iShares Dow Jones US Reg Banks Ind.(ETF) (NYSE: IAT) are prime examples of financial services exchange traded funds that have been confounded by declining Treasury yields.
Losses for more diversified ETFs tracking the sector are significantly less severe. For example, the Financial Select Sector SPDR Fund (NYSE: XLF) is down 6.5 percent year-to-date. It is not just declining Treasury yields that are hampering interest rate-sensitive regional bank stocks and ETFs. Oil prices are playing a part in these declines, too.
Short sellers have gone after regional banks with exposure to the energy sector, including some KRE holdings that are based in oil and gas-rich Oklahoma and Texas. ...
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