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Regional bank ETF flows didn't predict ZIRP continuation

By Benzinga
Asset Management

The Federal Reserve's decision Thursday to maintain its zero interest rate policy (ZIRP), not surprisingly, dealt a blow to regional bank stocks and the corresponding exchange traded funds.

However, recent flows data for ETFs such as the SPDR KBW Regional Banking (ETF)(NYSE: KRE), the largest regional bank ETF, and the SPDR KBW Bank (ETF) (NYSE: KBE) indicate many investors in these ETFs were expecting the Fed to cooperate and raise rates.
Two Weeks And Substantial Losses
Since the start of September through Wednesday, September 16, KRE and KBE lost $43.8 million and $11.2 million, respectively, in assets. One could say, “Hey, some investors were pulling out of these in advance of the Fed meeting.” Literally, that is true, but a combined $55 million in departures from these rate-sensitive ETFs is a blip on the radar when acknowledging KBE came into Thursday with $2.83 ...

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Photo: Got Credit

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