Investing in bank stocks provides exposure to the financial sector, but the industry currently faces challenges from economic downturns, increasing funding costs, and regulations. To navigate these challenges, investors can consider better-performing bank-themed exchange-traded funds (ETFs) that hold a portfolio of some of the nation's largest banks. The article outlines three relatively well-performing bank ETFs, excluding certain types of funds and those with less than $50 million in assets under management (AUM). All data is as of Sept. 25.
One of the recommended ETFs, KBE, seeks to provide returns similar to the S&P Banks Select Industry Index. It offers exposure to various banking sub-industries and includes well-known banks like JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and PNC Financial Services Group Inc.
Another recommended ETF, KBWB, aims to track the performance of the KBW Nasdaq Bank Index and includes respected names across the banking sector like JPMorgan, Goldman Sachs Group Inc., and Morgan Stanley.
The third ETF, FTXO, has an investment objective to deliver a return that corresponds to the Nasdaq US Smart Banks Index and includes top holdings such as Wells Fargo, JPMorgan, Citigroup, and Bank of America Corp.
The author does not own any of the mentioned ETFs as of the date of the article.