Financial ETFs Dominate Top-Performers List
NEW YORK (TheStreet) -- Five of the 10 best-performing exchange traded funds in the first quarter were propelled by financial firms.
The
SPDR KBW Bank ETF
(KBE) - Get Report
, which tracks the KBW Bank Index, returned 22%.
The ETF holds large commercial and regional banks including
Bank of America
(BAC) - Get Report
,
Citigroup
(C) - Get Report
,
Wells Fargo
(WFC) - Get Report
and
JPMorgan Chase
(JPM) - Get Report
. The index has retraced about a third of its loss since its February 2007 peak.
Still, proposed financial-regulation reforms are creating uncertainty for the current quarter. A bank tax and a limit on risk-taking could crimp profits. Now that the Obama administration has pushed through health-care reform, the president is setting his sights on banks, which rankled Americans because they paid for the bailout in 2008 only to watch the biggest companies produce near-record profits a year later.
However,
TheStreet.com's
senior banking analyst,
, says that, "based on analysts' projections for 'normalized earnings' and where valuations were before the credit crisis began, most bank stocks appear to be cheap despite the run-up." He said it's a "great time to go into the sector as it rises along with the economy."
The
First Trust NYSE Arca Biotechnology Index Fund
(FBT) - Get Report
produced a return of 30% in the first quarter, the best of any exchange traded fund. Cutting-edge holdings that dominate the ETF include
Human Genome Sciences
(HGSI)
,
Vertex Pharmaceuticals
(VRTX) - Get Report
and
Cephalon
(CEPH)
.
In a bullish sign for the economy, two consumer-cyclical ETFs finished in the top 10. The
PowerShares Dynamic Leisure & Entertainment Portfolio
(PEJ) - Get Report
sailed to a 17% gain with bets on
Starbucks
(SBUX) - Get Report
and
Carnival
(CCL) - Get Report
.
The popular
SPDR S&P Retail ETF
(XRT) - Get Report
charged ahead 16% with
Foot Locker
(FL) - Get Report
and
Whole Foods Market
(WFMI)
.
For the best-rated exchange traded funds, check out our
page.
-- Reported by Kevin Baker in Jupiter, Fla.
Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.