For investors seeking momentum, iShares U.S. Regional Banks ETF IAT is probably on radar now. The fund just hit a 52-week high, and is up about 27% from its 52-week low price of $41.83/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
IAT in Focus
This ETF offers exposure to small and mid-size U.S. regional banks with heavy concentration on the top two firms U.S. Bancorp USB and PNC Financial Services PNC at 14.2% and 12.4%, respectively, while other firms hold no more than 7.12% share. While regional banks make up for a substantial portion, diversified banks make up for about 14.2% share in the basket. The fund charges investors 44 basis points a year in fees (see: all the Financial ETFs here).
Why the Move?
The banking corner of the financial space has been an area to watch lately especially after the speculation of faster-than-expected rates hike. The upbeat jobs report initially sparked inflation fears and the prospect of speedy rates hike. Then, the Fed minutes signaled a hawkish stance and now the new Fed chairperson Jerome Powell has hinted at more rate hikes than the three penciled in for this year in its first testimony to Congress. Rising rates have been great for the banking sector, as it will bolster their profit margins.
More Gains Ahead?
Currently, IAT has a Zacks ETF Rank #3 (Hold) with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
U.S. Bancorp (USB) : Free Stock Analysis Report
ISHARS-US RG BK (IAT): ETF Research Reports
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