U.S. bank stocks saw a huge sell-off at the start of this year. Shares of all major U.S. banks tumbled amid a sell-off in the broader market. In fact, Financials have been the worst performers in the S&P 500 so far this year. Financial stocks have come under pressure due to low interest rates and concerns over balance sheets. This week though some major U.S. banks reported earnings. And while earnings have been weak, they did beat expectations, giving a boost to banking stocks.
With U.S. banking stocks rebounding, it might be a good time to consider an ETF focused on the U.S. banking sector. The BMO Equal Weight U.S. Banks Hedged Index (ETF) (TSX: ZUB) is a way Canadian investors can get exposure to the U.S. banking sector.
The fund has been designed to replicate the Selective Equal Weight U.S. Bank Index Canadian dollar hedged. The fund invests in the equity of large cap U.S. banks. Year-to-date, ZUB has fallen more than 12%, underperforming the S&P/TSX Composite Index. In the last five days though, the fund is up more than 7%.
