Bank ETFs Get Whipsawed by Investors as Yellen Comments
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Exchange-traded funds that target financial firms were whipsawed as Federal Reserve Chair Janet Yellen’s remarks on interest rates left investors struggling to gauge how soon future increases will help U.S. bank profits.
Financial-industry ETFs took in $868 million from March 19 through last week, more than funds for any other sector, after Yellen signaled borrowing costs might rise in 2015’s first half, according to data compiled by Bloomberg. The surge reversed on March 31 with investors pulling $324 million after Yellen said the Fed will maintain its stimulus for “some time.” That could mean rates and related earnings stay low for longer.