La vendita allo scoperto per Vanguard Financials ETF dà agli investitori un'idea del grado in cui gli investitori stanno scommettendo sul declino delle azioni di Vanguard Financials ETF. I dati relativi alle vendite allo scoperto vengono aggiornati ogni due settimane.

Vanguard Financials ETF (ARCA:VFH), Report sulle vendite allo scoperto

Vanguard Financials ETF

Vanguard Financials ETF - DNQ

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The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index (IMI)/Financials 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the financials sector, as classified under the Global Industry Classification Standard (GICS). The Advisor attempts to replicate the target index by seeking to invest all, or substantially all, of its assets in the stocks that make up the index, in order to hold each stock in approximately the same proportion as its weighting in the index. The fund is non-diversified.

Jpmorgan Chase & Co.

Berkshire Hathaway Inc

Mastercard Inc. Class-a

Visa Inc

Bank Of America Corp.

Wells Fargo & Co.

Goldman Sachs Group Inc.

American Express Co.

S&P Global Inc

Progressive Corp.

After Donald Trump's decisive win in the <a href="https://www.benzinga.com/topic/2024-election">2024 U.S. presidential election</a>, Wall Street reacted strongly, particularly in the financial sector. The Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>) rose 4.84%, while the Vanguard Financials Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VFH#NYSE">VFH</a>) gained 5.33% in early Wednesday trading.
Meanwhile, the S&amp;P 500-tracking SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>), and the Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>) were up about 2%.
<h2 class="wp-block-heading">A Big Win for Banks on Election Day</h2>
As of 10 a.m. ET on Wednesday, seven of the top 10 performing S&amp;P 500 stocks were in the financial sector, with Discover Financial Services (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFS#NYSE">DFS</a>), Capital One Financial Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COF#NYSE">COF</a>), and Synchrony Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SYF#NYSE">SYF</a>) leading the charge.
Trump's victory promises a more favorable regulatory landscape for banks, fueling investor optimism.
Read Also: <a href="https://www.benzinga.com/trading-ideas/long-ideas/24/11/41776661/tesla-gm-norwegian-cruise-push-consumer-discretionary-ahead-of-s-p-500-on-election-day">Tesla, GM, Norwegian Cruise Push Consumer Discretionary Ahead Of S&amp;P 500 On Election Day</a>
<h2 class="wp-block-heading">Top Financial Performers: A Look At The Leaders</h2>
<ul>
<li>Discover Financial Services: Soaring 23.5%, Discover led the pack with a stellar performance, reflecting confidence in its growth under a friendlier regulatory environment.</li>
<li>Capital One Financial: Not far behind, Capital One saw a 16.85% jump, as investors anticipate an environment ripe for growth and profitability.</li>
<li>Synchrony Financial: Synchrony surged 15.82%, signaling strong investor confidence in the credit services sector, thanks to expected regulatory relief.</li>
</ul>
<h2 class="wp-block-heading">Major Banks Join The Rally</h2>
The big banks also joined in on the rally, spurred by Trump's potential to push for relaxed financial regulations:
<ul>
<li>Wells Fargo &amp; Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WFC#NYSE">WFC</a>): The bank gained 13.1%, reflecting optimism about its prospects under a less regulated environment.</li>
<li>Goldman Sachs Group Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GS#NYSE">GS</a>): With a 10.29% increase, Goldman benefited from the market rally and hopes of tax cuts and looser regulations.</li>
<li>Morgan Stanley (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MS#NYSE">MS</a>): Rising 9.92%, Morgan Stanley's strong performance mirrored the broader rally in financials.</li>
</ul>
Overall, Trump's win has amplified investor optimism across the financial sector, with expectations for growth driven by regulatory easing and potential tax cuts.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/11/41772701/trumps-historic-return-7-ways-his-second-term-could-impact-the-us-economy">Trump&#8217;s Historic Return: 7 Ways His Second Term Could Impact The US Economy</a></li>
</ul>
Photo: Anna Moneymaker/Shutterstock.com

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ETFs

Trump Victory Sends Bank Stocks Higher, Leading S&P 500 On Regulatory Hopes

Designed to provide broad exposure to the Financials - Broad segment of the equity market, the Invesco S&amp;P 500 Equal Weight Financials ETF (ARCA:RSPF) is a passively managed exchange traded fund launched on 11/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
<h2>Index Details</h2>
The fund is sponsored by Invesco. It has amassed assets over $271.83 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RSPF seeks to match the performance of the S&amp;P 500 EQUAL WEIGHT FINANCIALS INDEX before fees and expenses.
The S&amp;P 500 Equal Weight Financials Index equally weights stocks in the financial sector of the S&amp;P 500 Index.
<h2>Costs</h2>
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.41%.
<h2>Sector Exposure and Top Holdings</h2>
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund&#39;s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Cboe Global Markets Inc (BATS: <a class="ticker" href="https://www.benzinga.com/stock/cboe#BATS">CBOE</a>) accounts for about 1.60% of total assets, followed by Truist Financial Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tfc#NYSE">TFC</a>) and Globe Life Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gl#NYSE">GL</a>).
The top 10 holdings account for about 15.42% of total assets under management.
<h2>Performance and Risk</h2>
So far this year, RSPF has gained about 14.40%, and is up about 29.31% in the last one year (as of 09/12/2024). During this past 52-week period, the fund has traded between $48.10 and $68.77.
The ETF has a beta of 1.05 and standard deviation of 13.82% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
<h2>Alternatives</h2>
Invesco S&amp;P 500 Equal Weight Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RSPF is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Financials ETF (ARCA:VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (ARCA:XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.80 billion in assets, Financial Select Sector SPDR ETF has $43.50 billion. VFH has an expense ratio of 0.10% and XLF charges 0.09%.
<a href="https://www.zacks.com/stock/news/2335011/should-you-invest-in-the-invesco-s-p-500-equal-weight-financials-etf-rspf?cid=CS-BENZ-FT-sector_etf-2335011">To read this article on Zacks.com click here.</a>

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Should You Invest in the Invesco S&P 500 Equal Weight Financials ETF?

JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) has provided an <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/08/40289608/soundhound-ai-posts-q2-beat-but-analysts-focus-on-amelia-acquisition">artificial-intelligence assistant </a>to more than 60,000 employees, with plans to eventually make the technology available throughout the company.
The program, called LLM Suite, is designed to help employees with tasks such as writing emails and reports, CNBC <a href="https://www.cnbc.com/2024/08/09/jpmorgan-chase-ai-artificial-intelligence-assistant-chatgpt-openai.html">reported</a>.
The bank launched the system with ChatGPT maker OpenAI's large language model, but LLM Suite will allow employees to use other LLMs depending on use cases.
Competitor Morgan Stanley (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MS#NYSE">MS</a>) has given a pair of OpenAI-powered tools to its financial advisors, and Apple Inc. said in June that it was equipping the operating system of hundreds of millions of its consumer devices with OpenAI models.
Read Also: <a href="https://www.benzinga.com/news/24/08/40255295/amazons-4b-stake-in-anthropic-under-uk-investigation-for-anti-competitive-concerns">Amazon&#8217;s $4B AI Partnership With Anthropic Under UK Investigation For Anti-Competitive Concerns</a>
 The bank has introduced LLM Suite so far to its consumer division, investment bank, and asset and wealth management business to give them a hand with writing, summarizing long documents, solving problems with Excel and coming up with ideas.
JPMorgan is already using generative AI to create marketing content for social media channels, create itineraries for a travel agency it acquired in 2022 and summarize meetings for financial advisors, said Chief Data and Analytics Officer Teresa Heitsenrether, as reported by CNBC.
The firm also uses AI to determine where to put new bank branches and ATMs through satellite images, help call center personnel quickly find answers and prevent fraud in its global-payments business, she told CNBC.
The bank plans to eventually use AI to provide autonomous AI agents&nbsp;to carry out complex multistep tasks, a move that may empower some workers but displace others.
Price Action: Shares of JPMorgan were up 0.97% to $206.04 at the time of publication Friday.
<ul>
<li>iShares U.S. Financial Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYG#NYSE">IYG</a>) ticked up 0.45%</li>
<li>Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>) gained 0.26%</li>
<li>iShares U.S. Financials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYF#NYSE">IYF</a>) rose 0.32%</li>
<li>Vanguard Financials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VFH#NYSE">VFH</a>) went up 0.27%</li>
<li>Fidelity MSCI Financials Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FNCL#NYSE">FNCL</a>) was up 0.42%</li>
</ul>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/top-stories/24/08/40284758/benzingas-stock-whisper-index-5-stocks-investors-secretly-monitor-but-dont-talk-about-yet" target="_blank" rel="noreferrer noopener">Benzinga&#8217;s ‘Stock Whisper&#8217; Index: 5 Stocks Investors Secretly Monitor But Don&#8217;t Talk About Yet</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Fintech news covering the emerging Financial Technology services sector

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FNCL

iShares Dow Jones US Financial Sector Index Fund

iShares Trust Dow Jones US Financial Services Index Fund

JPMorgan Rolls Out AI Assistant To 60,000 Employees For Enhanced Productivity

The Vanguard Financials ETF (ARCA:VFH) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
<h2>Index Details</h2>
The fund is sponsored by Vanguard. It has amassed assets over $9.39 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Broad segment of the equity market. VFH seeks to match the performance of the MSCI US Investable Market Financials 25/50 Index before fees and expenses.
The MSCI US Investable Market Index/Financials 25/50 measures the investment return of stocks in the financial sector.
<h2>Costs</h2>
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF&#39;s expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.89%.
<h2>Sector Exposure and Top Holdings</h2>
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, JPMorgan Chase &amp; Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) accounts for about 8.77% of total assets, followed by Berkshire Hathaway Inc and Mastercard Inc.
The top 10 holdings account for about 42.55% of total assets under management.
<h2>Performance and Risk</h2>
The ETF has gained about 9.98% and is up about 19.07% so far this year and in the past one year (as of 08/08/2024), respectively. VFH has traded between $75.97 and $107.02 during this last 52-week period.
The ETF has a beta of 1.09 and standard deviation of 19.50% for the trailing three-year period, making it a medium risk choice in the space. With about 407 holdings, it effectively diversifies company-specific risk.
<h2>Alternatives</h2>
Vanguard Financials ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VFH is an excellent option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Financials ETF (ARCA:IYF) tracks Dow Jones U.S. Financials Index and the Financial Select Sector SPDR ETF (ARCA:XLF) tracks Financial Select Sector Index. IShares U.S. Financials ETF has $2.94 billion in assets, Financial Select Sector SPDR ETF has $40.75 billion. IYF has an expense ratio of 0.40% and XLF charges 0.09%.
<a href="https://www.zacks.com/stock/news/2318765/should-you-invest-in-the-vanguard-financials-etf-vfh?cid=CS-BENZ-FT-sector_etf-2318765">To read this article on Zacks.com click here.</a>

Should You Invest in the Vanguard Financials ETF?

The big three fund managers that jointly manage more than $23 trillion in assets are coming under the scrutiny of federal regulators over their large holdings in many <a href="https://www.benzinga.com/topic/banks">U.S. banks</a>.
BlackRock Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLK#NYSE">BLK</a>), State Street Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STT#NYSE">STT</a>) and Vanguard run funds that passively track the performances of equity indexes such as the S&amp;P 500. To achieve this, they attempt to match the weightings of stocks held in these funds, to the index weightings.
But in doing so, BlackRock and Vanguard have each built holdings of more than 10% of the shares at several banks, and this is worrying the Federal Deposit Insurance Corp (FDIC), one of the government institutions responsible for banking supervision.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/02103557/newplot-2024-04-02T153538.964.png" alt="" class="wp-image-274036" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/02103557/newplot-2024-04-02T153538.964.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/02103557/newplot-2024-04-02T153538.964-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/04/38047230/historic-s-p-500-rally-in-q1-flashes-bullish-signals-for-2024-only-the-ninth-time-s">Historic S&amp;P 500 Rally In Q1 Flashes Bullish Signals For 2024: &#8216;Only The Ninth Time Since 1940&#8217;</a>
<h2 class="wp-block-heading">Ten Percent Rule</h2>
At present, 10% ownership of shares is considered a threshold at which point an investor is considered to have a controlling interest in a bank. Investors must then seek regulatory permission to acquire shares beyond this threshold.
But fund managers are largely exempt from this requirement given their passive investment roles, although they can still use their share ownership to vote in shareholder meetings.
Some board members of the FDIC, are becoming concerned that the big fund managers could overlook their commitment to passive investment and exert greater influence over banks, given the size of their stakes.
Board member Jonathan McKernan <a href="https://www.wsj.com/finance/regulation/regulator-probes-blackrock-and-vanguard-over-huge-stakes-in-u-s-banks-b9f58619?mod=latest_headlines">told</a> the Wall Street Journal of his concerns and is seeking a curb on BlackRock and Vanguard from acquiring further shares above the 10% threshold while the FDIC investigates.
&#8220;We need to be doing more to actually confirm that the Big Three are not leveraging their large stakes to exert influence over FDIC-regulated banks,&#8221; he told the WSJ.
BlackRock owns the iShares series of exchange-traded funds. Its flagship ETF that follows the S&amp;P 500 is the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>). Vanguard, meanwhile, manages the Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>), while State Street runs the SPDR series and the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) is its big index tracker.
<h2 class="wp-block-heading">&#8216;Problem Of Twelve&#8217;</h2>
It&#8217;s not only regulators who have concerns over the influence of the big funds. In his 2023 book &#8220;The Problem of Twelve,&#8221; Harvard law professor John Coates asserts that roughly 12 people will have effectively seized power over the majority of U.S. public companies in the future.
He issued similar <a href="https://globalreports.columbia.edu/books/the-problem-of-twelve/">warnings</a> about &#8220;a small number of institutions [that] acquire the means to exert outsized influence over the politics and economy of a nation.&#8221;
He says in the book: &#8220;The Big Four index funds of Vanguard, State Street, Fidelity, and BlackRock control more than 20% of the votes of S&amp;P 500 companies — a concentration of power that's unprecedented in America.&#8221;
In its iShares US Financials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYF#NYSE">IYF</a>) BlackRock&#8217;s biggest banking holdings are in JPMorgan Chase &amp; Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>), Bank of America Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAC#NYSE">BAC</a>) and Wells Fargo &amp; Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WFC#NYSE">WFC</a>). The Vanguard Financials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VFH#NYSE">VFH</a>) holds the same three stocks but with differing weightings.
Benzinga reached out to the FDIC for further details, but the agency said it was not commenting.
Now Read: <a href="https://www.benzinga.com/news/earnings/24/04/38021303/fanduel-success-drives-flutter-to-seek-primary-listing-on-nyse">FanDuel Success Drives Flutter To Seek Primary Listing On NYSE</a>
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General

Could 3 Powerful Fund Managers Take Control Of US Banks?

Recent data reveals a substantial exodus of deposits from U.S. banks, <a href="https://www.benzinga.com/news/23/08/33799989/rising-risk-us-banks-face-deposit-flight-threat-with-shrinking-profits">increasing apprehensions about the robustness of the nation&#39;s financial </a>institutions.
What Happened: According to&nbsp;<a href="http://fred.stlouisfed.org/graph/?g=1aK2v">Federal Reserve Economic Data</a>, there was&nbsp;a staggering $100 billion reduction in deposits within U.S. commercial banks in just three weeks.
Specifically, the deposits plummeted from $17.38 trillion on Sept. 27&nbsp;to a concerning $17.28 trillion by Oct. 18.
The&nbsp;alarming trend coincided with a&nbsp;<a href="https://www.federalreserve.gov/publications/financial-stability-report.htm">survey </a>spearheaded by the Federal Reserve. Engaging 25 diverse participants, including market experts, academicians&nbsp;and investment strategists, the survey aimed to assess the current health and future trajectory of the banking sector.
According to the survey, despite the banking sector&#39;s apparent stability after the financial hiccups earlier this year, most believed looming threats persist.
The survey participants said in the report, &quot;Although survey respondents noted the banking sector has stabilized since the period of acute stress earlier this year, many highlighted risks of renewed deposit outflows given that large portions of deposits remain uninsured.&quot;
Also Read:&nbsp;<a href="https://www.benzinga.com/news/23/10/35362567/us-banking-titans-jpmorgan-chase-wells-fargo-and-citigroup-lose-84-5-billion-in-deposits-amid-global">US Banking Titans JPMorgan Chase, Wells Fargo And Citigroup Lose $84.5 Billion In Deposits Amid Global Uncertainties</a>
The survey also highlighted another concern about the commercial real estate (CRE) sector. With fluctuating interest rates and dwindling demand for office spaces&nbsp;thanks to the burgeoning hybrid work culture, the CRE sector has emerged&nbsp;as a potential destabilizer.
The survey&#39;s findings indicated, &quot;Survey respondents viewed small and regional domestic banks as particularly vulnerable due to their higher concentration of CRE exposures, which could lead to tighter bank lending conditions.&quot;
Such concerns have cast shadows over the banking stocks, such as&nbsp;Bank of America Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bac#NYSE">BAC</a>) and&nbsp;JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>), as well as ETFs, like the&nbsp;Financial Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlf#NYSE">XLF</a>) and the&nbsp;Vanguard Financials ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vfh#NYSE">VFH</a>), with investors closely monitoring the situation. A prolonged deposit flight could weaken the banks&#39; liquidity positions, potentially affecting their lending capabilities and overall financial health.
Now Read:&nbsp;<a href="https://www.benzinga.com/news/23/07/33333530/heres-how-78-billion-exited-the-us-banking-system-in-just-one-week" target="_blank">Here&#39;s How $78 Billion Exited The US Banking System In Just One Week</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Federal Reserve

US Banks Witness Whopping $100 Billion Deposit Drop In Just Three Weeks, Fed Survey Raises Alarm

On <a href="https://www.cnbc.com/video/2021/03/15/final-trades-facebook-penn-national-ontrak-more.html">CNBC&#39;s &quot;Fast Money Halftime Report,&quot;</a> Joe Terranova said Penn National Gaming, Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/penn#NASDAQ">PENN</a>) is the real revenue increase play.
Vuzix Corp (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vuzi#NASDAQ">VUZI</a>) reports earnings on Monday and Stephen Weiss expects it to be phenomenal in terms of what the CEO says about the future and the current order book.
Tiffany McGhee said Ontrak Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/otrk#NASDAQ">OTRK</a>) was getting hammered because it lost its biggest client. This is a long-term play for her.
Meghan Shue likes Vanguard Financials Index Fund ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vfh#NYSE">VFH</a>).
Kevin O&#39;Leary is a buyer of Facebook Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fb#NASDAQ">FB</a>).

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'Halftime Report' Picks For March 15: Facebook, Vuzix And More

On CNBC: Jason Snipe Highlights New Buy In Vanguard Financials, Thinks Will Continue To 'Moderately Grow' This Year

New Federal Reserve Chairman <a href="https://www.benzinga.com/general/politics/17/11/10274397/everything-you-need-to-know-about-jerome-powell-trumps-pick-for-fede">Jerome Powell</a> testified before Congress last week, stoking speculation the central bank could raise interest rates as many as four times this year.
Some market participants used Powell&#39;s comments as a reason to funnel cash to exchange-traded funds tracking financial services stocks. For example, the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>), the second-largest ETF tracking the sector, saw inflows of $237.1 million for the week ended March 2.
VFH &ldquo;saw&nbsp;$235 million in inflows last week -- the most received in any single week on record for the fund -- as Powell <a href="https://www.bloomberg.com/news/articles/2018-02-26/asia-stocks-to-rise-as-u-s-gains-before-powell-markets-wrap">spoke about the strength </a>of the U.S. economy and the outlook for inflation,&rdquo; <a href="https://www.bloomberg.com/news/articles/2018-03-05/rate-savvy-investors-embraced-financials-etf-as-powell-testified">reports Bloomberg</a>. &ldquo;His comments raised the possibility that the Fed could speed up its timeline for three interest rate hikes this year, or even add a fourth to the mix. And finance firms are one part of the market that could get a boost from that.&rdquo;
<h3>
	Popular Destinations</h3>
Financial services stocks and ETFs are often popular destinations for investors following Fed commentary that indicates higher rates are on the horizon.
VFH is one of the least expensive financial services ETFs with an annual fee of just 0.10 percent, or $10 on a $10,000 investment. The ETF holds 408 stocks, including significant exposure to JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), Bank of America Corp. (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) and Wells Fargo &amp; Co. (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>). Nearly 47 percent of the ETF&#39;s roster is allocated to diversified and regional banks.
VFH&#39;s primary rival, the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>), took in over $154.4 million last week. XLF, the largest financial services ETF, allocates a combined 27.7 percent of its weight to JPMorgan, Bank of America and Wells Fargo. Of the 10 largest U.S.-listed financial services ETFs, only XLF has lost money this year, according to Bloomberg data.
<h3>
	The Cheapest Alternative</h3>
Market observers believing VFH is gathering more assets than XLF because of the former&#39;s lower fee, may be right. Sort of. The least expensive financial services ETF in the U.S. is the Fidelity MSCI Financials Index ETF (NYSE: <a class="ticker" href="/stock/fncl#NYSE">FNCL</a>), which charges 0.084 percent per year, or $8.40 on a $10,000 investment. Boston-based Fidelity has the cheapest sector ETFs in the U.S.
Investors have added $365 million to FNCL this year, well below the $665.7 million added to VFH. The two ETFs have offered nearly identical returns over the past year, each rising 15 percent.
Disclosure: The author owns shares of XLF.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/03/11301426/choppy-seas-for-the-guggenheim-shipping-etf">Rough Waters For This Shipping ETF</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/03/11292867/reit-etfs-arent-done-even-as-rates-rise">REIT ETFs Confront Rising Rates</a>
<a href="https://www.flickr.com/photos/federalreserve/25824732524">Image credit</a>

Long Ideas

Powell Prompted Inflows To Financial Services ETFs

In 1928, Congress passed a joint resolution establishing Child Health Day, the express <a href="https://www.law.cornell.edu/uscode/text/36/105">purpose </a>of which was to raise awareness &ldquo;of the fundamental necessity of a year-round program to protect and develop the health of the children of the United States.&rdquo;
Monday, on the nation&rsquo;s 88th Child Health Day, Congress is reflecting on its failure to renew the <a href="https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program/">Children&rsquo;s Health Insurance Program</a>, which technically expired Friday amid House attempts to repeal the Affordable Care Act.
For the last 20 years, CHIP has provided comprehensive coverage to youth whose parents earn too much to qualify for Medicaid. The law is credited with decreasing the percentage of children without insurance from 14 percent in 1997 to 4.5 percent in 2015.
Its continuation is now uncertain.
Related Link: <a href="https://www.benzinga.com/news/17/09/10091370/healthcare-stocks-spike-after-mccain-announces-no-vote-on-graham-cassidy-proposa">Health Care Stocks Spike After McCain Announces 'No' Vote On Graham-Cassidy Proposal</a>
<h3>What&rsquo;s At Stake</h3>
The House Energy and Commerce Committee will <a href="https://www.axios.com/house-to-move-forward-on-chip-next-week-2490584583.html">work on a bill</a> this week to reauthorize spending, projected at $17.4 billion for 2018, but the immediate lapse could significantly impact some of the 9 million children enrolled in the program.
Although most states can extend aid with rollovers from their two-year allotments, Minnesota <a href="https://www.vox.com/policy-and-politics/2017/9/27/16373494/chip-funding-reauthorization-congress">had been on course</a> to expend its entire share Sept. 30 and was exploring &ldquo;extraordinary measures&rdquo; to continue coverage, including using $10 million from its general fund.
Some states are expected to exhaust their resources by the end of the year. Thirty-one will run out by March, according to the <a href="https://www.macpac.gov/wp-content/uploads/2017/03/Federal-CHIP-Funding_When-Will-States-Exhaust-Allotments.pdf">Medicaid and CHIP Payment and Access Commission</a>.
If Congress does not renew federal funding, states will be forced to decide whether to terminate their CHIP segments or proceed with significantly reduced budgets. Children in states that shut down the program will either shift to employer-sponsored or subsidized exchange coverage &mdash; or become uninsured.
Physicians <a href="https://www.washingtonpost.com/opinions/will-congress-force-me-to-deny-health-care-to-children-once-again/2017/08/07/734ff7fe-792a-11e7-9eac-d56bd5568db8_story.html?tid=a_inl&amp;utm_term=.c43f63b3461b">may be forced</a> to reject those uncovered patients and deny immunizations, sick visits and prescriptions, which <a href="https://www.washingtonpost.com/news/answer-sheet/wp/2017/10/01/9-million-kids-get-health-insurance-under-chip-congress-just-let-it-expire/?utm_term=.f338ac745779">may ultimately result</a> in public health crises.
At the time of publication, the Health Care SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlv#NYSE">XLV</a>) was trading at $82.41.
Related Link: <a href="https://www.benzinga.com/news/17/09/10122440/hhs-secretary-tom-price-heads-for-departure-gate-after-private-plane-scandal">HHS Secretary Tom Price Heads For Departure Gate After Private Plane Scandal</a>

Health Care

Legal

iShares Trust S&P Global Financials Sector Index Fund

iShares Trust S&P Global Healthcare Sector Index Fund

iShares Trust Dow Jones US Healthcare Sector Index Fund

Rydex ETF Trust Rydex S&P Equal Weight Financial ETF

Rydex ETF Trust Rydex S&P Equal Weight Health ETF

9 Million American Children Lost Funding For Their Insurance

Fed fund futures now say traders are paring bets that the Federal Reserve will raise interest rates later this month; but in August, inflows to financial services exchange-traded funds indicated otherwise.
Financial services, the S&amp;P 500&#39;s second-largest sector allocation behind technology, is lagging the benchmark U.S. equity index this year, as investors have become frustrated with the Fed&#39;s vague guidance regarding when borrowing costs will move higher. For example, the Financial Select Sector SPDR Fund (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>), the largest financial services ETF, is up 4 percent year-to-date, while the S&amp;P 500 is higher by 8.5 percent.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/08/8403632/even-with-no-fed-help-this-financial-etf-soars">Even With No Fed Help, This Financial ETF Soars</a></bzrelatedlink>
<h3>Focusing On Financials</h3>
&ldquo;S&amp;P Global Market Intelligence banking equity analyst Erik Oja thinks higher interest rates would be a positive for many companies he follows particularly the largest US banks, which have a lot of short-term investments which immediately benefit. For example, by his calculations, revenues for JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) were aided by $220 million in the first quarter of 2016 due to the December 2015 rate hike. Regional banks benefit more when market-driven long-term rates rise,&rdquo; said<a href="http://trymsatoday.com/"> S&amp;P Capital IQ</a> in a note out Wednesday.
XLF&#39;s primary rival, the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>), added nearly $502 million in new money last month, while XLF saw August inflows of over $471 million. S&amp;P Capital IQ has overweight ratings on XLF and VFH and a four-star rating on Dow component JPMorgan, the largest U.S. bank by assets. 
As S&amp;P Capital IQ notes, there are important differences between XLF and VFH.
<h3>XLF And VFH Are Not The Same</h3>
&ldquo;VFH includes small- and mid-cap companies not inside the S&amp;P 500 index and in addition at the beginning of September it sold its stake in REITs as part of the GICS changes that created an 11th sector. XLF plans to pay a special dividend equal to its REIT exposure to shareholders in mid-September when the S&amp;P 500 index rebalances,&rdquo; said the research firm.
As was recently <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/08/8403632/even-with-no-fed-help-this-financial-etf-soars">noted in this space</a>, the SPDR S&amp;P Insurance ETF (NYSE: <a class="ticker" href="/stock/kie#NYSE">KIE</a>) has been one of the best-performing financial services ETFs this year even with no help from the Fed. However, investors took profits in KIE last month. 
&ldquo;KIE incurred $61.4 million in net outflows, narrowing year to date inflows to $10.6 million,&rdquo; noted S&amp;P Capital.
Still, KIE has outpaced XLF and VFH year-to-date.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Disclosure: Todd Shriber owns shares of XLF.

Rate Hike Bets Spurred August Inflows To Financial ETFs

Sector rotation is very common in the stock market, as investors allocate investment dollars from an underperforming sector to an outperforming sector, or a sector that has the potential to offer superior returns.
"There's always rotation going on in these markets from one sector to another," Joel Elconin, co-host of Benzinga's daily <a href="https://soundcloud.com/bztv/premarket-prep-for-may-4-may-the-markets-be-with-you?in=bztv/sets/daily-broadcasts">PreMarket Prep explained during Wednesday's edition.</a> "There are a lot of different places people can place their money."
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/04/7823223/a-bullish-call-on-a-favorite-healthcare-etf">A Bullish Call On A Favorite Healthcare ETF</a></bzrelatedlink>
JJ Kinahan, TDAmeritrade's chief strategist was a guest on the segment and offered his expert opinion on sector rotation. He said that it was perhaps a bit surprising to see a sector rotation outside of financials, despite the fact that there has been no interest rate increase.
He added that many major financial firms touted that the exposure of their retail and corporate clients "seem to be going really well" &ndash; a fact that makes a sector rotation outside of financials even more surprising.
Kinahan continued that the healthcare segment is showing some good earnings results and he expects investors to rotate back into the space. However, he cautioned that in an election year, the healthcare sector is the most vulnerable out of every sector to rule and law changes.
<h3>A Few Relevant ETFs</h3>
<ul>
<li>iShares Dow Jones US Healthcare (ETF) (NYSE: <a class="ticker" href="/stock/iyh#NYSE">IYH</a>) is currently down 4.4 percent year-to-date, but up 7.95 percent over the last three months.</li>
<li>Guggenheim S&amp;P 500 Equal Weight Healthcare ETF (NYSE: <a class="ticker" href="/stock/ryh#NYSE">RYH</a>) is down 4.08 percent year-to-date, but up 7.66 percent over the last three months.</li>
<li>iShares S&amp;P Global Healthcare Sect.(ETF) (NYSE: <a class="ticker" href="/stock/ixj#NYSE">IXJ</a>) is down 4.31 percent year-to-date, but up 6.42 percent over the past three months.</li>
<li>ProShares Ultra Financials (ETF) (NYSE: <a class="ticker" href="/stock/uyg#NYSE">UYG</a>) is up 17.26 percent over the last three months and down 5.94 percent year-to-date.</li>
<li>Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) is up 10.62 percent over the past three months and down 2.17 percent year-to-date.</li>
<li>iShares Dow Jones US Financial (ETF) (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>) is up 10.28 percent over the three months, but down 2.29 percent year-to-date.</li>
<li>Guggenheim S&amp;P 500 Equal Weight Financials ETF (NYSE: <a class="ticker" href="/stock/ryf#NYSE">RYF</a>) is down 1.46 percent year-to-date, but up 9.77 percent over the three-month period.</li>
<li>Fidelity MSCI Financials Index ETF (NYSE: <a class="ticker" href="/stock/fncl#NYSE">FNCL</a>) is down 2.76 percent year-to-date, but up 9.82 percent over the past three months.</li>
</ul>

Exclusives

Interview

Are We Seeing A Sector Rotation Away From Financials And Into Healthcare?

It is not a stretch to say nearly all market participants know the Federal Reserve meets this week, nor is it a stretch to say those market participants are divided over whether or not the central bank will proceed with raising interest rates.

	Fed funds futures indicate traders are not betting the Fed boosts borrowing costs and there is no shortage of commentary and punditry opining that the Fed has missed its window of opportunity to raise rates.

	Bottom line: The Fed will or will not raise interest rates this week. Bottom line, part two: Some sectors outperform others immediately following and for months after a Fed rate hike. As <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5832788/these-sector-etfs-could-shine-after-a-rate-hike">Benzinga reported last week</a>, Bank of America Merrill Lynch examined the sectors that perform well after Fed liftoff, those that disappointed and those that were somewhere in the middle. Bank of America used the prior six tightening cycles beginning March 1983, January 1987, March 1988, February 1994, June 1999 and June 2004.
<h3>
	Deeper Dive</h3>

	BofA&#39;s research suggests that Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) and the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) perform well after Fed raises rates. But wait, there&#39;s more. The bank also looked into the sectors that lag following the unveiling of higher interest rates.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5834046/nibbling-at-risk-with-etfs-in-the-week-ahead">Nibbling At Risk With ETFs In The Week Ahead</a>

	It is not surprising that the telecom and utilities sectors were among the laggards on BofA&#39;s post-rate hike list.

	&quot;Telecom was the worst or second worst performing sector in terms of average cumulative returns in 6 out of the 12 months following Fed liftoff,&rdquo; said BofA in a note out last week. The bank added &ldquo;utilities were lackluster throughout the 12 months after Fed liftoff.&rdquo;

	In terms of ETFs, it is worth remembering that the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is the most negatively correlated to interest rates among the nine sector SPDRs. If the Fed does raise rates, this week or any other time, it might be wise to avoid the Vanguard Telecommunication Services ETF (NYSE: <a class="ticker" href="/stock/vox#NYSE">VOX</a>) and the iShares U.S. Telecommunications ETF (NYSE: <a class="ticker" href="/stock/iyz#NYSE">IYZ</a>).
<h3>
	Surprise</h3>

	The surprise for investors when it comes to sector ETFs to buy in the wake of a Fed rate hike comes in the form of the ETFs not to buy, those being financial services funds. For the all talk of ETFs such as the Financial Services Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) needing higher interest rates as&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5730304/forget-deductibles-and-premiums-look-at-insurance-etfs">an upside catalyst</a>, the historical data cited by BofA does not support that case.

	In nine of the 12 months following Fed liftoff, financials were the worst or second-worst performing sector, according to BofA.

	&ldquo;Banks, Financials, and Telecom had negative average absolute returns 12-months after an initial Fed rate hike,&rdquo; said the bank.

	In the third quarter, it appears that investors are not buying into the notion that financial services ETFs could be disappointments if the Fed hikes rates. XLF, the largest financial services ETF, and the Vanguard Financial Services (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) have lost just $110 million combined in the current quarter.

Short Ideas

iShares Dow Jones US Telecommunications Sector Index Fund

Don't Mess With These ETFs If Interest Rates Rise

In a recent report, analysts at Morgan Stanley gave their take on consumer spending trends and what they mean for the U.S. economy in 2015.

	According to the most recent data, real discretionary personal consumption expenditure (PCE) increased to 3.7 percent in the fourth quarter, and analysts see strong evidence that the rise in spending will continue throughout 2015.
<h3>
	Consumer Liquidity Index</h3>

	The Morgan Stanley Consumer Liquidity Index (MSLQD) spiked from 4.3 to 6.0 in Q4. This increase in spending marked the first significant quarterly rise in the index since 2012.

	<img alt="" src="/files/u81483/liquidity_index.jpg" style="width: 480px; height: 253px;" />

	Analysts are able to use the MSLQD to forecast changes in PCE for the upcoming quarter. Using the most recent numbers, they see a PCE of 3.8 percent in 1Q15, slightly higher than the 4Q14 number.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/02/5219265/the-global-war-against-deflation-in-10-charts">The Global War Against Deflation In 10 Charts</a></bzrelatedlink>

	Analysts note that consumer liquidity increased in 2014 in spite of the persisting tight credit environment. &ldquo;Available credit continues to be a swing factor that can propel spending even higher as access to credit and willingness to use credit improves,&rdquo; they explained.
<h3>
	Energy Consumption</h3>

	Consumers dramatically increased their energy consumption in Q4. Gas prices fell by 30 percent last year, and the drop resulted in the highest number of highway miles traveled since 2007.
<h3>
	Which Sectors Benefit?</h3>

	The sector with the highest income elasticity is motor vehicles and parts. Not surprisingly, that sector demonstrated robust growth in Q4 relative to its average quarterly growth.

	<img alt="" src="/files/u81483/sectorspending.jpg" style="width: 480px; height: 240px;" />

	However, other sectors with high income elasticity did not demonstrate above-average growth in the quarter.

	Morgan Stanley analysts believe that these sectors, such as furnishings, financial services and transportation services, are likely to benefit from high consumer liquidity in upcoming quarters.

	Although not specifically mentioned by the firm, the SPDR S&amp;P Retail (ETF) (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>), SPDR Series Trust (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>) and Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) could be worth watching. The trio was up an average of 3.8 percent over the past week.

	Image credit: <a href="http://en.wikipedia.org/wiki/South_City#mediaviewer/File:SC_Mall_(2).JPG">Kolkatan</a>, Wikimedia

Econ #s

Morgan Stanley: These Sectors Will Benefit From Strong Consumer Spending In 2015

The impressive November jobs report helped propel the <a href="http://www.benzinga.com/topic/financials">financial sector</a> to the best level in over six years. The U.S. economy added 321,000 jobs in November, destroying expectations of 230,000. The number marked the 50th-straight month that the U.S has had positive job growth, the longest streak on record since World War II. It also marks the 10th straight month that at least 200,000 jobs have been added to the economy, the longest streak since a 19-month streak in 1995.

	The economy is moving at a much faster pace than many expected heading into the end of the year, prompting the belief that the Fed will increase interest rates earlier than previously expected. The financial sector would stand to benefit greatly from an increase in interest rates, as increased rates will increase the profit margins from lending money.

	Highlighted below is a number of financial ETFs that are responding to the solid jobs report and that could benefit from a rise in interest rates.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/14/12/5050822/best-and-worst-etfs-of-november">Best And Worst ETFs Of November</a></bzrelatedlink>
<h3>
	Select Sector Financial</h3>

	The Select Sector Financial Slct Str SPDR Fd (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) tracks 87 publicly traded companies in the financial sector with more than 36 percent in the banking stocks.

	The top individual holdings include:
<ul>
<li>
		Berkshire Hathaway Inc. Class B (NYSE: <a class="ticker" href="/stock/brkb#NYSE">BRK.B</a>) making up 9 percent</li>
<li>
		Wells Fargo &amp; Co (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>) with an 8.5 percent holding</li>
<li>
		JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) coming in at 8 percent</li>
</ul>

	XLF is up 13 percent year-to-date and 8 percent over the last six months. An expense ratio of 0.16 percent makes it a very favorable ETF in this sector. XLF hit new highs the last three trading days heading into the week.
<h3>
	Vanguard Financials</h3>

	The Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) follows 542 companies in the financials sector.

	The top individual holdings include:
<ul>
<li>
		WFC with a 7 percent holding</li>
<li>
		JPM making up 6 percent</li>
<li>
		Bank of America Corp. (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) coming in at 5 percent</li>
</ul>

	VFH is up 12 percent year-to-date and 7 percent over the last six months. It has an expense ratio of 0.18 percent.
<h3>
	iShares Dow Jones US Reg Banks</h3>

	The iShares Dow Jones US Reg Banks Ind.(ETF) (NYSE: <a class="ticker" href="/stock/iat#NYSE">IAT</a>) consists of 54 small and mid-sized domestic regional U.S. banks. The smaller, regional banks that tend to rely more on lending could be the biggest winners within the financial sector.

	The top holdings include:
<ul>
<li>
		U.S. Bancorp (NYSE: <a class="ticker" href="/stock/usb#NYSE">USB</a>) at 21 percent</li>
<li>
		PNC Financial Services Group Inc (NYSE: <a class="ticker" href="/stock/pnc#NYSE">PNC</a>) making up 12 percent</li>
<li>
		BB&amp;T Corporation (NYSE: <a class="ticker" href="/stock/bbt#NYSE">BBT</a>) coming in at 7 percent</li>
</ul>

	IAT is up 5.6 percent year-to-date and up 0.5 percent over the last six months. The ETF has an expense ratio of 0.43 percent.

	The jobs numbers was a bright spot in an improving economy, however it may not be enough to force the hand of the Fed to begin raising rates before mid-2015. With that being said, interest rates could continue to trade within a narrow range before the next leg higher begins at some point in the future.

BRKB

iShares Dow Jones US Regional Banks Index Fund

A Look At 3 Financial ETFs Amid November's Strong Jobs Report

The fact that people are living longer now than at any other time in history means there is an unusually high number of senior citizens alive in the United States.

	The Baby Boomer generation has begun entering retirement age, and a number of companies now catering to seniors may be smart stock picks. When investors look at the numbers of Americans turning 65 every year – an average of about three million over the last three years – they see opportunity, and understandably so.

	And this is only the beginning. It is expected that number will increase for at least the next ten years, and by the time that is all said and done – perhaps 12 to 15 years from now – close to 80 million Baby Boomers will have crossed the 65-year-old mark. So the obvious question becomes, "what products and services are these people going to be spending their money on?"

	But for investors the real question is, "what companies make the products and offer the services that these people will be spending their money on?" The answers can be challenging to find, but there is some insightful speculation as to which companies that cater to this up-and-coming age group might make solid stock picks.

	In this particular case, the wiser course of action may be to look for industries that cater to seniors -- and then find the companies within those industries that appear poised to benefit from the Baby Boomers over the next decade. It's all about trend identification, and some of the industries to look at include the following:

	Cruise Lines

	Cruise vacations are among the most popular options for exotic getaways, regardless of the age group. But senior citizens in particular have been known to pack cruise ships in greater numbers than any other demographic. That trend is only expected to increase in the coming years -- as retirees spend their hard-earned, hard-saved money on companies like Carnival (NYSE: <a class="ticker" href="/stock/ccl#NYSE">CCL</a>) and Royal Caribbean Cruises (NYSE: <a class="ticker" href="/stock/rcl#NYSE">RCL</a>).

	Healthcare Companies

	This one should be something of a no-brainer, and yet it is well worth mentioning as a smart investment. Prescription drugs have become a staple for Americans, and for those over 65 in particular -- and that trend is not expected to let up anytime soon, regardless of longer life expectancies. On average, 70-year-olds take triple the amount of prescription drugs that 40-year-olds do

	That means that mutual funds like Vanguard Health Care Fund (NASDAQ: <a class="ticker" href="/stock/vghcx#NASDAQ">VGHCX</a>) and Schwab Health Care Fund (NASDAQ: <a class="ticker" href="/stock/swhfx#NASDAQ">SWHFX</a>) are poised to make a major splash with big time holdings like Merck (NYSE: <a class="ticker" href="/stock/mrk#NYSE">MRK</a>) and Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>).

	Insurance Companies

	Americans approaching retirement age are becoming increasingly savvy with their finances, and money managers are responding in kind by creating products to cater to their needs. These are all challenging investments, but this one is particularly so -- since the range of products is relatively wide including asset management and annuities. It will be difficult to determine which specific companies will be the best investments, but certain ETFs like Vanguard Financials (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) and mutual funds like FBR Large Cap Financial (NASDAQ: FBRFX) will likely make solid additions to your portfolio.

Travel

Restaurants

SWHFX

Vanguard Specialized Portfolios Health Care Fund

VGHCX

Think Silver: Top Stocks Catering to Seniors

Last week was one to forget as U.S. stocks skidded to their worst weekly performance in nearly two months.

	A cacophony of tapering chatter from various members of the Federal Reserve was the culprit in a week that was otherwise light on economic data. Valuations may also be playing a part in investors' skittishness toward stocks.

	The S&amp;P 500 now trades at 15.3 projected earnings, up from a multiple of 13.1 at the beginning of this year, <a href="http://www.bloomberg.com/news/2013-08-10/u-s-stocks-have-worst-week-since-june-amid-fed-concern.html">Bloomberg reported</a>. There is that little tidbit and the fact that August, as has been mentioned plenty of times already, is not usually a great month to be long stocks and that seasonal trend appears to be at play again this year.

	Related: <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3796342/seasonal-trends-three-etfs-to-own-in-august">Seasonal Trends: Three ETFs to Own in August</a>.

	Some ETFs are already showing signs of dodging the late summertime blues. Plenty are worth monitoring in the week ahead. Here are a few to keep in mind.

	Materials Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlb#NYSE">XLB</a>) 
	The Materials Select Sector SPDR, to this point in 2013 the worst performer among the nine sector SPDRs, turned in a decent performance last month. That gain for XLB was helped in large part by news that investor Nelson Peltz had amassed a large stake in Dow component DuPont (NYSE: <a class="ticker" href="/stock/dd#NYSE">DD</a>), XLB's largest holding.

	On a related note, there was unusual options activity spotted last week in Dow Chemical (NYSE: <a class="ticker" href="/stock/dow#NYSE">DOW</a>) on speculation a yet-to-be identified activist investor has built a position in that stocks. For XLB shareholders, this is important news because Dow Chemical is the ETF's third-largest holding at a weight of 8.8 percent. With over 19 percent of XLB's weight reportedly drawing attention from activist investors, the under-performing ETF is one to watch in the weeks ahead.

	Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) 
	Or just about any other large financial services ETF that is heavy on big-name bank stocks. And the reason extends beyond the fact that the financial services sector trails only consumer discretionary and health care for the title of 2013'2 top-performing. As was noted <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3792951/spy-banks-could-be-boss-again">a couple of weeks ago</a>, financial services are close to reclaiming the top sector weight in the S&amp;P 500.

	That would be the first time the sector has worn that crown in more than five years. And it is the big banks that have been leading the sector's charge this year. Banks such as J.P. Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) and Wells Fargo (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>). Those stocks combine for about 18 percent of VFH's weight.

	iShares MSCI BRIC ETF (NYSE: <a class="ticker" href="/stock/bkf#NYSE">BKF</a>) 
	Well-documented is the fact that <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3198859/can-bric-small-cap-etfs-do-it-again-in-2013">BRIC ETFs</a> have not lived up to expectations this year. In fact, ETFs tracking Brazil, Russia, India and China, be they single-country or combination funds, have been utter disappointments.

	What makes the iShares MSCI BRIC ETF an interesting play at the moment is that the ETF is on the cusp of breaking resistance created by a multi-month downtrend line. Same goes for the largest China and Brazil ETFs and that is important because those two countries combine for over 69 percent of BKF's weight.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Emerging Markets

Specialty ETFs

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Emerging Market ETFs

Technicals

Currency ETFs

Global

Intraday Update

A Look Ahead: This Week's ETFs to Watch

It has been an excellent year to be long financial services ETFs. An average year-to-date return of 25.5 percent of the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) and the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) affirms as much. However, the strength of the financial services sector this year is not entirely attributable to money center and investment banks.

	Insurance providers have been contributing to the run-up in financial services ETFs and are doing so in significant fashion. Macro factors indicate insurance stocks may have more gas left in their respective tanks.

	"Although the economic recovery remains uneven and interest rates are still at low levels, we are increasingly optimistic that interest rates are poised to rise, which would benefit net interest income significantly. In addition, we believe that ongoing product revamps (less generous) and price hikes should help revenues and benefit expenses," said S&amp;P Capital IQ in a new research note.

	S&amp;P Capital IQ also cited increased buybacks and dividends as positive catalysts for insurance stocks. That assessment could prove accurate. For example, the PowerShares Buyback Achievers Portfolio (NYSE: <a class="ticker" href="/stock/pkw#NYSE">PKW</a>) allocates nearly 20 percent of its weight to the financial services sector, a <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/08/3814206/buyback-etf-defies-logic">substantial chunk of which goes to insurance names</a>.

	Still, interest rates are a concern with insurance stocks and ETFs.

	"Although we expect low interest rates to continue to weigh on net interest income in the near term, we expect the pressure to ease as interest rates now appear more likely to rise than fall, which should lead to greater new money investment yields. Since insurance companies invest a significant portion of their assets in fixed income securities, changes in interest rates can have a meaningful impact on net investment income, which is a significant component of total revenue. Net interest income accounted for about 24% of total revenues for the U.S. life insurance companies we follow," said S&amp;P Capital IQ.

	Related: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/10/2957147/insurance-etfs-your-broker-forgot-to-mention">Insurance ETFs Your Broker Forgot to Mention</a>.

	Insurance ETFs have proven resilient as interest rates have risen. Since the yield on 10-year U.S. Treasurys started rising in early June, the iShares U.S. Insurance ETF (NYSE: <a class="ticker" href="/stock/iak#NYSE">IAK</a>) is up 6.7 percent. The $151.1 million ETF has surged 27.6 percent year-to-date, helped in large part by its 12.1 percent weight to American International Group (NYSE: <a class="ticker" href="/stock/aig#NYSE">AIG</a>).

	Once the poster boy for all that went wrong during the financial crisis, AIG has been reborn. Last week, the company announced a quarterly dividend of 10 cents per share and new repurchase program of $1 billion. Other top holdings in IAK include MetLife (NYSE: <a class="ticker" href="/stock/met#NYSE">MET</a>) and Dow component Travelers (NYSE: <a class="ticker" href="/stock/trv#NYSE">TRV</a>). S&amp;P Capital IQ rates the ETF Overweight. IAK has annual fees of 0.47 percent..

	Another insurance ETF for investors to consider is the SPDR S&amp;P Insurance ETF (NYSE: <a class="ticker" href="/stock/kie#NYSE">KIE</a>). The $368.5 million KIE is up nearly 26 percent this year and operates in noticeably different fashion than IAK. KIE is more of an equal-weight play on the insurance. That more diverse approach has served KIE and <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/05/3588442/a-financial-services-etf-buffett-would-love">rival insurance-heavy ETFs well this year</a>.

	No stock accounts for than 2.5 percent of KIE's weight. Top-10 holdings include Lincoln National (NYSE: <a class="ticker" href="/stock/lnc#NYSE">LNC</a>), Prudential (NYSE: <a class="ticker" href="/stock/pru#NYSE">PRU</a>) and MetLife. S&amp;P Capital IQ also rates KIE Overweight. The fund has annual fees of 0.35 percent.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

iShares Dow Jones US Insurance Index Fund

S&P Bullish on a Pair of Insurance ETFs

Financial services ETFs have been stellar performers this year. An average year-to-date return of 19 percent for the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) and the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) indicates as much.

	Add to that, it is not a stretch to say that this sector is one of the most covered by the financial press. Whether it is good news or bad news, investors are treated to ample coverage on companies such as Goldman Sachs (NYSE: <a class="ticker" href="/stock/gs#NYSE">GS</a>) and Morgan Stanley (NYSE: <a class="ticker" href="/stock/ms#NYSE">MS</a>). For those reasons, it is somewhat surprising that more attention is not paid to the sub-sector ETFs that are explicit plays on investment banks, brokerage houses and capital markets firms.

	There at least three such ETFs and that trio, which will be highlighted, barely has a combined $200 million in assets under management. Only one of those funds, the iShares U.S. Broker-Dealers ETF (NYSE: <a class="ticker" href="/stock/iai#NYSE">IAI</a>), has over $100 million in AUM, and IAI only recently accomplished that feat.

	In other words, these are the type of the ETFs that critics love to hate. Let the haters hate because ignoring the following ETFs based on size, or lack thereof, <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2994238/ignoring-sub-100m-etfs-a-costly-idea">has proven quite costly</a>.

	iShares U.S. Broker-Dealers ETF 
	Starting with the group's largest member, let's have a look at the iShares U.S. Broker-Dealers ETF. As an aside, it appears as though money is continuing to flow into IAI as the ETF is up 1.2 percent today on volume that is more than double its daily average, a pretty nifty feat for a slow trading day such as the day after the Fourth of July.

	The 19 percent average year-to-date return offered by XLF and VFH is nice and should not be complained about. Well, if one does not know about IAI and the nearly 29 percent the ETF has returned this year then 19 percent is nice.

	IAI is home to 22 stocks with Goldman, Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) and Morgan Stanley combining for over 20 percent of the fund's weight. In other words, this is not an ETF that suffers from liquidity problems and we know this because in the second quarter, IAI never traded at a premium or discount to its net asset value of more than 0.5 percent, <a href="http://tools.ishares.wallst.com/ishares/qc/old_us/research/tools/premiumDiscount.asp?symbol=IAI">according to iShares data</a>.

	Here's a tip: If you use an adviser or hedge fund manager that told you to stay away from IAI in January because the ETF was too small, fire that person right away.

	SPDR S&amp;P Capital Markets ETF (NYSE: <a class="ticker" href="/stock/kce#NYSE">KCE</a>) 
	If IAI is too small for the critics, than what will they say about the SPDR S&amp;P Capital Markets ETF? KCE has just $68 million in AUM. There are differences between IAI and KCE, including the fact that the latter holds 51 stocks. KCE is also sort of an equal-weight play as none of its holdings garner more than a 3.3 percent weight.

	The overall breakdown with KCE 63 percent to asset managers and custodial banks and 37 percent to investment banks. KCE is up almost 15 percent year-to-date and features a tidy 3.4 percent dividend yield, <a href="https://www.spdrs.com/product/fund.seam?ticker=KCE">according to State Street data</a>.

	PowerShares KBW Capital Markets Portfolio (NYSE: <a class="ticker" href="/stock/kbwc#NYSE">KBWC</a>) 
	If IAI is small and KCE is smaller, than the so-called experts would have certainly told investors to stay away from the diminutive PowerShares KBW Capital Markets Portfolio because KBWC has just $8.1 million in AUM.

	Surely, with just $8.1 million in AUM KBWC would qualify as illiquid, providing the aforementioned "experts" with plenty of valid reasons to keep investors away from the fund, right? Wrong. While data for the second quarter is not yet available, the previous four quarters worth of data show that on just one occasion did the mid-point of KBWC's bid/ask spread trade at a sort of noticeable discount or premium <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=KBWC">to the ETFs underlying NAV</a>.

	State Street (NYSE: <a class="ticker" href="/stock/stt#NYSE">STT</a>), Morgan Stanley and Goldman combine for 27 percent of KBWC's weight. KBWC is proof positive that ignoring some small ETFs due to perceived liquidity risks is a bad idea. The data indicate this ETF is sufficiently liquid. The returns show an ETF that is up more than 26 percent this year.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

iShares Dow Jones US Broker Dealers Index Fund

KBWC

SCHW

Brokerage ETF Battle: Plenty of Winners

Check out this week&rsquo;s&nbsp;<a href="http://www.moneylifeshow.com/SaveFiles1/Upload_Files/130617%20-%20Danger%20Zone.mp3" style="color: rgb(0, 123, 184);">Danger Zone Interview</a>&nbsp;with Chuck Jaffe of&nbsp;<a href="http://www.moneylifeshow.com/" style="color: rgb(0, 123, 184);">Money Life</a>&nbsp;and MarketWatch.com

	Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) is in the Danger Zone this week and earns my Dangerous rating. Citigroup&rsquo;s stock has posted an impressive 20% rise thus far in 2013, but the stock&rsquo;s current price is simply out of touch with reality. As the market bulls continue to look to rising interest rates as a sign of future strength for Citi, they ignore the fundamentals of the market and of Citi&rsquo;s weak profit history.

	Dangerous Fundamentals

	Even before the financial crisis, Citi struggled to create value for investors. Figure 1 shows that Citi&rsquo;s return on invested capital (<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC</a>) has been below its weighted average cost of capital (<a href="http://blog.newconstructs.com/2012/11/08/wacc-definition-and-formula-for-the-weighed-average-cost-of-capital/" style="color: rgb(0, 123, 184);">WACC</a>) in every year since 2000, which means Citi has not had positive&nbsp;<a href="http://blog.newconstructs.com/2010/08/05/economic-versus-accounting-earnings/" style="color: rgb(0, 123, 184);">economic earnings</a>&nbsp;any year in this century. Citi is the only one of the Big Four financial institutions with this ignominious distinction.

	Since 2000, Citi&rsquo;s after tax profits (<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>) have declined by 4% compounded annually. During this time, its return on invested capital (<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC)</a>&nbsp;has fallen from 12% to under 3% in 2012, putting it in the bottom quintile of all companies I cover.
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		Figure 1: Return on Invested Capital vs. Weighted Average Cost of Capital
</div>
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		<a href="http://blog.newconstructs.com/wp-content/uploads/2013/06/DZCG1.jpg" style="color: rgb(0, 123, 184);"><img alt="DZCG1" class="aligncenter size-full wp-image-7070" height="190" src="http://blog.newconstructs.com/wp-content/uploads/2013/06/DZCG1.jpg" style="border-style: none; display: block; text-align: center; margin: 1em auto;" width="431" /></a>Sources:&nbsp;&nbsp; New Constructs, LLC and company filings
</div>

	The main issue is that despite its weak history, Citigroup continues to be highly overvalued by investors. Investors and analysts are missing red flags in the footnotes and making mistaken assumptions about future profitability. The end result is that Citi&rsquo;s valuation is out of sync with its fundamentals.

	Hidden in the Footnotes

	Taking a closer look at the financial footnotes reveals&nbsp;<a href="http://blog.newconstructs.com/2011/01/20/red-flag-report-hidden-management-failures-asset-write-downs/" style="color: rgb(0, 123, 184);">management failure to create value</a>&nbsp;for investors. Specifically, in 2012 Citi recorded $6.4 billion in&nbsp;<a href="http://blog.newconstructs.com/2013/06/10/asset-write-downs-hidden-in-operating-earnings/" style="color: rgb(0, 123, 184);">asset write-downs</a>&nbsp;in 2012 alone, and over $17 billion total in write-downs over the past few years.

	In fact, Citi posted the greatest net amount of asset write downs of any company in 2012, equal to almost 10% of its revenue. The fact that Citi is a leader in destroying shareholder value should be a red flag for investors.

	Rising Interest Rates Does Not Mean Rising Margins

	Per my article on&nbsp;<a href="http://blog.newconstructs.com/2013/05/21/why-im-bullish-and-we-are-not-in-a-bubble/" style="color: rgb(0, 123, 184);">why I&rsquo;m bullish and we are not in a bubble</a>, I believe the economy is improving, albeit slowly but surely. The Fed seems to agree and has signaled it will taper quantitative easing in the foreseeable future.

	Of course, QE tapering means rising interest rates, which usually imply rising net interest margins and profit growth for lending institutions.

	However, I do not believe Citi will benefit from rising rates as much as the market expects. For Citi&rsquo;s net interest margin to rise, the firm needs to add a substantial amount of higher-margin loans to its book. To achieve that profitable growth, demand for new loans needs to be high. And I do not think demand for debt is or will be very high again anytime soon.

	There is no pent up appetite for debt. Those hungry for additional cash have already been sated at ultra-low rates and will have no need for debt when interest rates rise.

	Key to the Fed&rsquo;s strategy to keep interest rates low for the past several years is to incentivize borrowing and lending. That strategy has worked as many people and firms, even those that do not need to borrow, have taken on debt to take advantage of low rates.

	Even Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) with over $100 billion in cash on their balance sheet took on debt to pay its shareholder dividends, taking advantage of low rates while they persist. The cash will stay on their balance sheet, but these interest rates are a temporary luxury.

	The more rates rise in the future, the slower borrowing will be. For example, how much mortgage refinancing should we expect after mortgage rates rise? Most anyone who needed or wanted to refi has likely done so by now, perhaps multiple times. The same is true for most other types of borrowing.

	Some have touted Citi&rsquo;s global presence as a key asset as other more domestic-oriented corporations work to catch up to Citi&rsquo;s reach. This may be true, but as long as economic weakness persists in Europe (i.e. Euro debacle) and Asia (i.e. Japan, the world&rsquo;s #3 economy) there is not much opportunity for Citi to generate profits. Moreover, as long as interest rates in Europe and Asia remain near rock bottom, Citi&rsquo;s net interest margins will continue to remain low and its earnings will continue on the same track. I think Citi may have sucked all the blood out of the international turnip.

	No Easy Way Up

	Even if Citi were to streamline its business, dump all bad debt and focus only on the most profitable portions of its business, it still has a long way to go to justify the expectations in its stock&rsquo;s current valuation. To be specific: assuming Citigroup can maintain the huge NOPAT margin increase it achieved in 2012 (from 1.4% to 13.7%), it still needs to grow after-tax profit (<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>) by nearly 12% compounded annually for 15 years to justify its current stock price of ~$50/share.

	A look at Citi&rsquo;s history makes such a growth expectation seem unlikely. For the past 14 years, Citi has grown NOPAT by 1% compounded annually, with an average margin of under 13%. To meet the market&rsquo;s expectations, Citi would need a return to its growth rate and margins from mid-2000&rsquo;s. which were rather unusual times. With tightened financial regulation, the market rally slowing down, and no asset bubbles in sight, it&rsquo;s hard to see how 2013 Citi can match the profitability of 2005 Citi.

	Watch Out for the ETFs and Mutual Funds that Hold C

	Investors should avoid the following ETFs and mutual funds due to their Dangerous or worse rating and their significant (4% or more) allocation to C:

	1. Vanguard Financials Index Fund Admiral Shares (MUTF:VFAIX)

	2. Rydex Series Banking Funds (MUTF:RYBKX, MUTF:RYKCX, MUTF:RYKAX, MUTF:RYKIX)

	3. Saratoga Advantage Trust Financial Services Portfolio (MUTF:SFPAX, MUTF:SFPBX, MUTF:SFPCX)

	4. RevenueShares Financials Sector Fund (NYSE: <a class="ticker" href="/stock/rww#NYSE">RWW</a>)

	5. Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>)

	Andr&eacute;&nbsp;Rouillard and Sam McBride&nbsp;contributed to this article.

	Disclosure: David Trainer, Sam McBride and Andr&eacute; Rouillard receive no compensation to write about any specific stock, sector or theme.

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