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Regional Banks ETFs Take a Hit as Housing Cools, Lending Slows

  • KRE had most monthly outflows in November since January 2015
  • Financial stocks are under pressure with interest rates rising
Aerials Views Of British Columbia's Capital As Luxury Real Estate Rises
Photographer: James MacDonald/Bloomberg

With interest rates rising and the housing market slumping, exchange-traded fund buyers aren’t banking on regional banks.

Investors pulled $547 million from the $4 billion SPDR S&P Regional Banking ETF, ticker KRE, in November, its biggest monthly outflow since January 2015 and the second straight month of net withdrawals. Meanwhile, the $3 billion SPDR S&P Bank ETF, which known by its ticker KBE and owns a broader swath of banks including regionals, saw more than $213 million leave the fund last month, the most since May and the seventh month of outflows in the last eight.