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BlackRock has launched the iShares S&P US Banks UCITS ETF, providing exposure to US equities from firms operating in the banking industry.
The fund provides exposure to large-cap US banking stocks including Wells Fargo, JP Morgan Chase, Bank of America, CitiGroup, and US Bancorp.
The ETF tracks the S&P 900 Banks (Industry) 7/4 Capped Index. Constituents are sourced from the S&P 900 Index, a reference for large- and mid-cap equities listed in the US. The index is weighted by market capitalization with the weighting of the largest five components capped at 7% and the remaining index components capped at 4%. Rebalancing occurs quarterly in March, June, September and December.
There are currently 49 index constituents with approximately two-thirds (65.7%) of the index weight allotted to regional banks and the remaining one-third (34.2%) in diversified banks.
The largest five constituents, each with a weight of 7%, are Wells Fargo, JP Morgan Chase, Bank of America, CitiGroup, and US Bancorp.
The index has an annualized five-year return of 16.9% with an annualized standard deviation of 18.2% over the same period.
Source: S&P Dow Jones Indices.
Income generated within the portfolio is treated as accumulating.
The fund has a total expense ratio (TER) of 0.35%. It has been listed on London Stock Exchange in US dollars (BNKS LN) and on Xetra in euros (IUS2 GR).
While there are a number of ETFs in Europe providing exposure to the European banking industry, the new iShares product is the first to exclusively target banking stocks in the US. There are however a few ETFs providing exposure to the broader US financials sector.
The largest of these is also offered by BlackRock. The iShares S&P 500 Financials Sector UCITS ETF (IUFS LN) has just under $2 billion in assets under management and has a TER of 0.15%. The fund has a 34.8% allocation to diversified banks and a 9.6% allocation to regional banks.
Both the SPDR S&P US Financials Select Sector UCITS ETF (SXLF LN) and the Source Financials S&P US Select Sector UCITS ETF (XLFS LN) have AUM above $500 million. SXLF also has a TER of 0.15%, while XLFS costs double the previous funds with a TER of 0.30%.