ETF Wrap: Bank ETFs rise as earnings roll out – but investors aren’t piling in with cash

by | Apr 20, 2023 | Stock Market

Hello! This week’s ETF Wrap shines the light on banking ETFs after March’s brutal selloff and as banks deliver their first-quarter earnings. Please send feedback and tips to [email protected] You can also follow me on Twitter at @cidzelis and find me on LinkedIn. Sign up here for our weekly ETF Wrap.

Investors may still be licking their wounds from last month’s bank failures.  Shares of SPDR S&P Bank ETF
and SPDR S&P Regional Banking ETF
have climbed this week as banks report their first-quarter earnings, but after being spooked in mid-March by the sudden failure of Silicon Valley Bank in California, investors aren’t piling funds into the beaten down ETFs. The SPDR S&P Regional Banking ETF has seen a tiny outflow of about $3 million over the past week through Wednesday, with $895 million of withdrawals over the past month, according to FactSet data. And the broader SPDR S&P Bank ETF has attracted only around $7 million of inflows over the past week through Wednesday, with investors pulling slightly more than $2 million over the past month.  Investors “can breathe a sigh of relief that we haven’t seen another shoe drop in recent weeks, but we are still in a rising interest rate environment that could be problematic for the industry in general,” said Todd Rosenbluth, head of research at VettaFi, by phone. “There remains uncertainty about what’s next for the space.” Banks recently began reporting results for the first quarter, with major Wall Street firms kicking off company earnings season at the end of last week. Based on ETF flows, investors appear more comfortable with big banks and more diversified exposure in the financial sector since the regional banking turmoil seen after the collapse of Silicon Valley Bank and Signature Bank, according to Rosenbluth. Large banks JPMorgan Chase & Co.
Citigroup Inc.
and Wells Fargo & Co.
WFC, …

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