The selection of mid-tier US financial stocks with market caps of $2bn - $5bn is exclusively size-based
- reasonably stable because of their local weight and market share
- representative of America’s regional economies
With traditional activities of managing deposits and lending, mid-tier finance offers insights on regional economic growth in their respective trading areas
Because commercial banks and savings could be exposed early on to an economic downturn, affecting some regions more deeply than others, our selection might reliably anticipate broader regional developments
Although recent market highs may have pushed the finance sector in overbought territory, according to many commentators, quarterly performance trends of our selection remain a valuable tracking tool, signaling potential economic weaknesses in advance
Selected as benchmark of the selection, the Invesco KBW Bank ETF
The KBW index is a modified-market capitalization-weighted index of companies primarily engaged in US banking activities
The Index is compiled, maintained and calculated by Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. and is composed of large national US money centers, regional banks and thrift institutions that are publicly traded in the US.