NEW YORK (TheStreet) -- Five of the 10 best-performing exchange traded funds in the first quarter were propelled by financial firms.
SPDR KBW Bank ETF
, which tracks the KBW Bank Index, returned 22%.
The ETF holds large commercial and regional banks including
Bank of America
. 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.
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."
First Trust NYSE Arca Biotechnology Index Fund
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
In a bullish sign for the economy, two consumer-cyclical ETFs finished in the top 10. The
PowerShares Dynamic Leisure & Entertainment Portfolio
sailed to a 17% gain with bets on
SPDR S&P Retail ETF
charged ahead 16% with
Whole Foods Market
For the best-rated exchange traded funds, check out our
-- 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.