Weighing In On Citigroup (NYSE: C) Within These Financial ETFs
“Citigroup (NYSE: C) beat analysts’ first-quarter earnings estimates, prompting investors to push up its stock by 7% yesterday. With the gain, Citigroup’s stock (C) has soared more than 40% this year, giving investors an opportunity to buy more and possibly cash in as the bank’s balance sheet improves — or sell on expectations the rally has gotten ahead of itself given there are obstacles ahead,” Kevin Baker Reports From The Street.
Baker goes on to say, “Above are the exchange traded funds with the highest concentration of Citigroup shares, according to Marco Polo XTF. The ETF with the biggest stake in Citigroup shares is KBW Bank ETF (NYSE: KBE), at 8.4% of assets. The iShares Dow Jones US Financial Services (NYSE: IYG) is second at 6.5%. All five of the ETFs have had a great year. Even though they haven’t recovered all of their losses over the past three years, it may be time to look for the exit.”
The Street’s stock model grades Citigroup’s stock (NYSE: C) at D, or “sell.” Their bearish view also states that the government will begin selling it’s 7.7 billion share stake in Citigroup and that will weigh in on the stock.
Investors must realize that Citigroup (NYSE: C) can play a major role in these ETFs in different ways even though it’s weighting may be small in some of the ETFs. Citigroup can weigh in on the financial sector up or down and put pressure on these ETFs in either direction.
We have put together some details on the ETFs with the biggest stakes in Citigroup below for your viewing. (All weightings are subject to daily changes)
SPDR KBW Bank ETF (KBE)
The investment seeks to replicate the performance of the KBW Bank index. The fund uses a passive management strategy designed to track the total return performance of the Bank index. It is nondiversified.
| TOP 10 HOLDINGS ( 60.04% OF TOTAL ASSETS) |
|
Dow Jones U.S. Financial Services Index Fund (IYG)
The iShares Dow Jones U.S. Financial Services Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the financial-services sector of the U.S. equity market, as represented by the Dow Jones U.S. Financial Services Index.
|
Top Daily Holdings*
as of 4/21/2010 |
|
|---|---|
| BANK OF AMERICA CORP | 12.44% |
| JPMORGAN CHASE&CO | 12.34% |
| WELLS FARGO&COMPANY | 11.08% |
| CITIGROUP INC | 6.95% |
| GOLDMAN SACHS GROUP INC | 4.69% |
| US BANCORP | 3.66% |
| AMERICAN EXPRESS CO | 3.31% |
| VISA INC-CLASS A SHRS | 2.99% |
| MORGAN STANLEY | 2.69% |
| BANK OF NEW YORK MELLON CORP | 2.64% |
| Total | 62.80% |
| *Holdings are subject to change. | |
Rydex 2x S&P Select Sector Financial (RFL)
The investment seeks to replicate, net of expenses, 200% of the daily performance of the Financial Select Sector index. The fund employs as its investment strategy a program of investing in equity securities contained in the underlying index, and leveraged derivative instruments, such as equity index swaps, futures contracts, and options on securities, futures contracts, and stock indices. It holds U.S. government securities or cash equivalents to collateralize its derivative positions. The fund is nondiversified.
| TOP 10 HOLDINGS ( 408.50% OF TOTAL ASSETS) |
|
Financial Select Sector SPDR Fund (XLF)
The Financial Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Financial Select Sector Index (ticker: IXM). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
| As of04/20/2010 | |||
| Name | Weight | Shares Held | |
| Bank Of America Corporation | 10.20% | 40,127,410 | |
| Jpmorgan Chase & Co | 9.96% | 15,892,510 | |
| Wells Fargo & Co New | 9.54% | 20,722,680 | |
| Berkshire Hathaway Inc Del | 7.24% | 6,619,463 | |
| Citigroup Inc | 5.34% | 78,595,200 | |
| Goldman Sachs Group Inc | 4.60% | 2,104,997 | |
| American Express Co | 3.02% | 4,788,486 | |
| Us Bancorp Del | 2.95% | 7,653,422 | |
| Morgan Stanley | 2.33% | 5,591,069 | |
| Bank Of New York Mellon Cor | 2.12% | 4,834,696 | |
Vanguard Financials ETF (VFH)
The investment seeks to track the performance of a benchmark index that measures the investment return of financial stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI U.S. Investable Market Financials index. This index consists of stocks of large, medium-size, and small U.S. companies within the financials sector. This sector is made up of companies involved in activities such as banking, mortgage finance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporate lending, insurance, financial investment, and real estate. It is non diversified.
| TOP 10 HOLDINGS ( 41.62% OF TOTAL ASSETS) |
|
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