Is Citigroup Inc Plan Rejection Trouble For These ETFs? [PowerShares KBW Bank Portfolio ETF, RevenueShares Financials Sector (ETF)]

iShares U.S. Financial Services ETF (NYSEARCA:IYG)

This product follows the Dow Jones U.S. Financial Services Index, holding 110 stocks in its basket. Of those firms, Citigroup takes the fourth spot, making up 7.28% of assets. Banks dominate the fund’s portfolio with 57% share from the sector look while financial services make up for the remainder (read: Bank on Dividends with These Financial ETFs).

IYG is a large cap centric fund with a tilt toward value stocks. It has amassed $641.6 million in its asset base and sees moderate average daily volume of over 70,000 shares. It charges a slightly higher fee of 45 bps from investors. The product lost about 2.6% in the past five trading sessions.

RevenueShares Financial Sector Fund (NYSEARCA:RWW)

This ETF tracks the RevenueShares Financial Sector Index, a benchmark that gives exposure to about 81 stocks that are weighted by revenues instead of market capitalization. Citigroup takes the fourth position in this ETF at 6.47%. Here again, the fund is skewed toward large cap and value stocks.

In terms of industrial exposure, bank and insurance make up for the top two sectors at 34% and 31%, respectively, while financials services, investment companies and asset management round off to the top five. RWW was down nearly 2.6% over the past five days.

Bottom Line

Though more pain might be in store for the company and these ETFs in the near term, the longer term seems bright as they have a top Zacks Rank of ‘1’ or ‘2’, suggesting long-term outperformance. Further, the banking stocks are poised to benefit from a rising interest environment and an improving U.S. economy.

Given this, investors could wait for the stock and the ETFs to bottom out and then tap the opportunity of beaten down prices with the above-mentioned funds.

This article is brought to you courtesy of Sweta Killa.

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