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For investors looking for momentum, SPDR S&P Regional Banking ETF (KRE) is probably a suitable pick. The fund just hit a 52-week high — up roughly 33.8% from its 52-week low of $43.95/share.
Does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
KRE in Focus
The underlying S&P Regional Banks Select Industry Index represents the regional banks segment of the S&P Total Market Index. The fund charges 35 bps in fees (see all financial ETFs here).
Why the Move?
Steepening yield curve thanks to a Wall Street rally, favorable earnings picture and a value focus pushed bank stocks and the related ETFs higher lately. Since banks borrow money at short-term rates and lend capital at long-term rates, steepening of the yield curve is always a plus for bank ETFs. On Dec 12, the spread between the 10-year and two-year treasury yield stood at 24 basis points versus 16 percentage points recorded at the start of the year, benefitting bank stocks and ETFs.
More Gains Ahead?
The fund has a Zacks ETF Rank #3 (Hold). It also has a positive weighted alpha of 22.30, which gives cues of further rally.
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