Should You Invest in the Invesco KBW Bank ETF (KBWB)?
Looking for broad exposure to the Financials - Banking segment of the equity market? You should consider the Invesco KBW Bank ETF (KBWB), a passively managed exchange traded fund launched on 11/01/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Advertisement: High Yield Savings Offers
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $3.77 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Banking segment of the equity market. KBWB seeks to match the performance of the KBW Nasdaq Bank index before fees and expenses.
The KBW Nasdaq Bank index is a modified-market capitalization-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly-traded in the US.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.40%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Jpmorgan Chase & Co (JPM) accounts for about 8.44% of total assets, followed by Wells Fargo & Co (WFC) and Goldman Sachs Group Inc/the (GS).
The top 10 holdings account for about 60.88% of total assets under management.
Performance and Risk
So far this year, KBWB return is roughly 2.18%, and is up about 27.09% in the last one year (as of 06/04/2025). During this past 52-week period, the fund has traded between $51.56 and $72.21.
The ETF has a beta of 1.06 and standard deviation of 27.76% for the trailing three-year period, making it a high risk choice in the space. With about 28 holdings, it has more concentrated exposure than peers.