Bank of America (BAC) shares are threatening to break above $10 and the stock has helped lead financial sector ETFs sharply higher in March.
Financial ETFs have seen about $1.5 billion in inflows over the last week with the Financial Select Sector SPDR (XLF) gaining about $1.2 billion of those assets. ETFs lacking Bank of America shares have underperformed and analysts warn that they may do so going forward, reports Shanthi Bharatwag for The Street.
Shares of Bank of America have almost doubled since the start of 2012, lately hovering around $10. Since the beginning of March the stock has gained about 25%, leading the latest large cap bank rally.
As KBW analyst Fred Cannon wrote in a note Tuesday, large-cap banks have outperformed the sector, with the KBW Bank Index gaining 26% year to date compared to the S&P Banks Select Industry Index, up 22.3%, with both topping the overall S&P Financial Select Sector Index (IXM) performance, which is up 20.96%.
Bank of America has had a reversal of fortune based on signs that the U.S. economy is re-gaining strength. Bank of America dropped 58% last year on concern over rising mortgage risks and the uncertainty over the European debt crisis, reports Hug Son for Bloomberg.
Other top-performing financial ETFs:
- PowerShares KBW Bank Portfolio (KBWB)
- Market Vectors Bank and Brokerage ETF (RKH)
- RevenueShares Financial (RWW)
- iShares Dow Jones US Financial Services Fund (IYG)
PowerShares KBW Bank Portfolio
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.