Invesco KBW Bank ETF

KBWB

Market cap $5.11B

Designed to provide broad exposure to the Financials - Banking segment of the equity market, the Invesco KBW Bank ETF (KBWB) is a passively managed exchange traded fund launched on November 1, 2011.

The first rate cut of the year gives investors the opportunity to position their portfolios to capture future upside in certain sectors, should further cuts occur. History has an uncanny ability to repeat itself, and it's telling us that we should target the financial sector.

Invesco KBW Bank ETF remains a "Buy," supported by strong year-to-date performance from top holdings Goldman Sachs and JPMorgan Chase. KBWB has outperformed the S&P 500 since the second quarter, aided by robust dividend payouts and favorable seasonal trends for banks. Despite a higher valuation and some technical momentum concerns, KBWB's long-term earnings growth and rising 200-day moving average are constructive.

CNBC's “Closing Bell Overtime” team is joined by Gerard Cassidy, co-head of global financials research at RBC Capital Markets, to discuss banking sector stocks and his outlook for financials.

Big banks??? earnings surge, resilient deal activity, and favorable valuations put focus on financial ETFs like XLF, VFH, KBWB and IYF.

Launched on November 1, 2011, the Invesco KBW Bank ETF (KBWB) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Banking segment of the equity market.

The Federal Reserve's July FOMC meeting came and passed precisely as expected: without any change to its benchmark effective federal funds rate (EFFR).

US banks' net interest margins are poised to expand, but higher-for-longer interest rates and uncertainty created by tariffs will push credit costs higher and limit earnings growth in 2025. Banks' earnings should remain healthy through the first half of the year, buoyed by continued margin expansion, steady loan growth and benign credit quality.

The record rally in equities churns on, with the latest batch of strong bank results helping fuel the market's forward momentum. Stocks suffered from whiplash to start the second quarter.

Invesco KBW Bank ETF has enjoyed stellar form lately, but cyclical headwinds have emerged. A softer lending environment is likely en route, and credit risk seems to be at an inflection point. Strong stress test results mitigate tail risk but don't prevent cyclical earnings decay.