A Regional Banking BEARISHares ETF Proposal

Regional Banking BEARISHares

click to enlarge

The above table presents the 25 lowest-rated stocks in my US-based Regional Banking BEARISHares Index. The index contains a total of 99 companies with market caps between $500 million to $20 billion which are classified as either regional banks or savings and loan companies. The ratings for each company are calculated quarterly based on a formula which considers the price-to-book ratio, the trailing 52-week stock price performance, and the percentage of total market caps represented by each company.

The 25 lowest-rated stocks in the Regional Banking BEARISHares experienced a trailing 52-week stock price change of -55.8% on an equal-weight basis as of 5/27/08 when the index was last updated. As an inverse exchange-traded fund [ETF], this product would provide investors with a focused trading option to bet against the small and mid-cap regional banks without the need for margin accounts and short selling individual stocks.

In addition, this index performed favorably on an inverse/short basis compared to existing ETF benchmarks such as iShares Dow Jones US Regional Banks (IAT, -32.1%), Regional Bank HOLDRs (RKH, -28.8%), KBW Regional Banking (KRE, -30.3%), PowerShares Dynamic Banking (PJB, -17.5%), and UltraShort Financials ProShares (SKF, +59.2%).

Disclosure: None

Comments

[morgan77]

Saw that the housing sector was the big winner last week and did a little more research on it. This article (www.greenfaucet.com/fa...) argues that housing may finally have reached a bottom. Check it out if you're interested in buying.

[AmesTiedeman]

Morgan, Housing has not reached a bottom in many part of the country. We are in a multi-decade bubble in placed like Southern California where wages cannot support prices.