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The 6 Best Bank ETFs for American Bulls

It’s the start of earnings season, which means bank stocks and other financial stocks have been thrust into the spotlight once again. Banks help kick off each quarter’s run of earnings reports, first by majors such as Bank of America (BAC) and JPMorgan Chase (JPM), then followed by regional and community banks.

By and large, bank ETFs are among the most direct ways you can invest to express confidence in the U.S. economy. Robust economic activity means more business for banks – more mortgages, auto loans and business loans, as well as spending via personal credit.

As America’s economy improves, the Federal Reserve should continue to hike its target for the fed funds rate, which over time should lift interest rates. (The fed funds rate currently stands at a range of 1%-1.25%.) Rising rates, in turn, help banks by improving their net interest margin; that is, the spread between what banks pay out in interest on deposits and what they earn in interest from mortgages and other loans. It’s no guarantee – higher rates can also dissuade consumers from taking out loans – but broadly, rising rates are viewed as bullish for bank stocks.


Bank stocks and other financial stocks can provide strong portfolio growth as the economy expands. However, there’s more than one way to invest in financials, depending on what your investment goals are and how much risk you’re willing to assume. These six bank ETFs provide varying ways to gain exposure to the financial sector.

SEE ALSO: Kiplinger's 20 Favorite ETFs for Investors

Data is as of Oct. 16, 2017. Click on ticker-symbol links in each slide for current share prices and more. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

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