Thursday, 23 March 2023

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Buy Oversold Bank Stocks with These ETFs – TipRanks Financial Blog

Buy Oversold Bank Stocks with These ETFs – TipRanks Financial Blog

Many investors are interested in buying oversold bank stocks right now. Renowned banks that have little to do with the collapse of Silicon Valley Bank are now trading well below their 52-week highs and at sizable discounts to book value. 

Unfortunately, it can be difficult to be opportunistic when you are worried that a position can become a zero overnight. This is why it can be beneficial to invest in bank ETFs instead of picking individual bank stocks. This approach allows investors to take advantage of some of these bargain-bin valuations and gain exposure to a rebound in the banking sector as a whole without exposing themselves to single-stock risk. Therefore, here are three bank ETFs that can help investors achieve this.


The SPDR S&P Bank ETF is part of the popular SPDR series of ETFs from State Street, in this case, focused on banks. KBE seeks to provide investment results that correspond to the total return performance of the S&P Banks Select Industry Index before fees and expenses. 

As mentioned above, the diversification of ETFs is particularly appealing right now when investing in banks, and KBE delivers this diversification in spades. KBE holds 98 positions, and not a single one of these positions makes up more than 2% of the fund. Its top 10 holdings make up just 17.3% of assets, giving investors tremendous protection from the possibility of another bank going under. Top holding Voya Financial (NYSE:VOYA) makes up just 1.9% of assets.

Below is a look at KBE’s top holdings using TipRanks’ holdings tool.

KBE features a reasonable expense ratio of 0.35% and adds to its appeal with a dividend yield of 3.6%. With a reasonable expense ratio, attractive dividend yield, and broad diversification across the banking industry, KBE offers investors a great way to play the theme of an eventual rebound in the banking sector. 

What is the Price Target for KBE Stock?

While analysts collectively view KBE as a Hold, the average KBE stock price target of $49.74 implies upside potential of 31.3% from current prices. Of the 519 ratings on the ETF, 49.13% are Buys, 45.86% are Holds, and 5.01% are Sells.

TipRanks uses proprietary technology to compile analyst forecasts and price targets for ETFs based on a combination of the individual performances of the underlying assets. By using the Analyst Forecast tool, investors can see the consensus price target and rating for an ETF, as well as the…

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