Seeking Alpha
 

Guggenheim S&P Equal Weight Financial ETF (RYF)

- NYSEARCA
  • Mar. 19, 2014, 3:13 PM
    • A check of sectors following the FOMC statement and updated projections suggesting a quickened pace of rate hikes in the future finds the banks and life insurers notably moving higher. Both groups have struggled earning a spread amid ZIRP and are positively levered to higher rates.
    • Lenders: Bank of America (BAC +1%), Citigroup (C +1%), JPMorgan (JPM), Regions (RF +1.7%), KeyCorp (KEY +0.9%), SunTrust (STI +0.7%).
    • Life insurers: MetLife (MET +1%), Prudential (PRU +0.7%), Lincoln National (LNC +1%).
    • Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, KIE, SEF, IYG, IAK, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, KBWP, KBWI, FINZ, KBE, KRE
    • Not necessarily positively levered to higher rates are the mortgage REITs (REM -1.6%): Annaly (NLY -1.8%), American Capital (AGNC -1.7%), (MTGE -1.9%), Armour (ARR -1.3%), Two Harbors (TWO -2%) CYS Investments (CYS -3.3%), Capstead (CMO -1.3%), MFA (MFA -1.8%).
    • Related ETFs: MORT, MORL
    | 14 Comments
  • Mar. 13, 2014, 10:40 AM
    • "To us, the year started slow," says Deutsche Bank (DB -0.9%) CFO Stefan Krause. "Obviously through political uncertainty we started to have market uncertainty again and a slowdown in business."
    • Krause's warnings of a continued slowdown in investment banking business echo those of Citigroup and JPMorgan over the last couple of weeks.
    • Fixed income revenue has been slowing since May, with some banks (notably Goldman) insisting the fall is temporary, but others say boosted capital requirements has squeezed margins and left overcapacity, meaning more job cuts as banks shrink and restructure.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ
    | 2 Comments
  • Mar. 5, 2014, 3:42 PM
    • Buying the rumor? On a flattish day for the major averages, the Too Big To Fail banks are ignoring a continued slowdown in markets revenue this quarter, and instead partying ahead of what may be the imminent release of the Fed's stress test results (perhaps Friday). About one week later will be CCAR results at which the Fed gives the thumbs up or thumbs down on the banks' capital return plans.
    • Word is the tests are tougher this year, but bank capital levels are also improved.
    • Leading today is Bank of America (BAC +3%) - now within about one percent of a 4-year high. Others: Morgan Stanley (MS +2.8%), Goldman Sachs (GS +1.8%), Ciitgroup (C +1%), JPMorgan (JPM +1.5%), and Wells Fargo (WFC +0.6%).
    • Also subject to the stress tests are a number of regional lenders, not to mention credit card players - they're mixed in today's action.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
    | 8 Comments
  • Feb. 25, 2014, 12:59 PM
    • With bank capital levels really no longer in question, don't expect any big pops in the banks surrounding the stress tests and CCAR results, says Citi in its "2014 CCAR Playbook." If anything - given that the stress tests are supposedly tougher this year - the risk to banks could be on the downside.
    • The team expects the stress test results - which looks at bank balance sheets under different scenarios - sometime around March 7 and the CCAR results - on which the Fed approves/disapproves capital return plans - about a week later.
    • Look for modestly higher average gross payout ratios of 62% vs. 55% last year. Individual banks: BAC 11% dividend (payout ratio) + 32% buyback for 43%; BBT 33% dividend +19% buyback; FITB 32% dividend + 37% buyback; JPM 27% dividend + 18% buyback; WFC 28% dividend + 43% buyback; GS 14% dividend + 78% buyback for an industry-leading payout ratio of 91%; MTB 34% dividend + 0% buyback; MS 17% dividend + 36% buyback; PNC 31% dividend + 49% buyback; USB 30% dividend +46% buyback.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FINU, FNCL, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
    | 4 Comments
  • Feb. 20, 2014, 3:29 PM
    • Expecting dividends to grow 49% on average for the banks subject to the Fed's stress tests (about the same as last year), Markit, says Citigroup (C) and Bank of America (BAC) will lead the way with 400% boosts. "They are the last of the major banks paying minimal dividends ... change is overdue."
    • While 400% is a big number, Citi and BofA will continue to lag their peers in terms of yield (400% growth on a penny just leads to a nickel).
    • Also expected to have a significant pop is Morgan Stanley (MS) - a doubling of the payout to $0.10 per share and a 1.4% yield. Others in the top 5 in increases are Zions Bancorp (ZION) with a 75% boost to $0.07 and Regions Financial (RF) up 67% to $0.05.
    • The others: KEY +27%, HBAN +20%, BK +20%, STI +20%, COF +17%, DFS +15%, AXP +13%, STT +12%, JPM +11%, CMA +11%, PNC +9%, USB +9%, GS +9%, FITB +8%, WFC +7%, NTRS +6%, and no soup for BBT and MTB where the dividends are expected to be flat at $0.23 and $0.70 per share, respectively.
    • As for ETFs, the dividend jumps are expected to have the biggest impact on the XLF which would see a 25% increase in payout: The ETF has 81 companies, but the top 5 holdings - BofA, Wells, JPM, Citi, USB - make up 41% of assets. In contrast, just two CCAR banks make up the top five holdings of the KBE and it should see a more muted increase of just 18%.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ
    | 13 Comments
  • Feb. 12, 2014, 1:08 PM
    • Wells Fargo (WFC) has lowered the minimum FICO score for borrowers applying for FHA loans to 600 from 640, and JPMorgan (JPM +0.1%) plans to lower LTV standards for both jumbos and conforming mortgages, reports TheStreet.
    • The moves come as the MBA predicts 1-4 family mortgage originations will fall to $1.16T this year from $1.755T in 2013. An early estimate from Inside Mortgage Finance pegs MBS issuance by the GSEs in January of just $67.8B, off 10% since December and the lowest amount since January 2009.
    • "The wall has begun to come down," writes FBR's Paul Miller of the Wells Fargo news. Miller has been calling for easier standards to combat slowing activity, and if Wells is now approving FHA product to riskier borrowers, other large originators are likely to follow suit. In this case, his own estimate of $1.3T in mortgage originations this year could prove conservative, and bank earnings surprises going forward might be on the upside.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, KME, RKH, QABA, FINU, KRU, FNCL, KBWR, RWW, RYF, PSCF, KRS, FINZ
    | 23 Comments
  • Jan. 27, 2014, 2:54 PM
    • “It is now obvious to us that the continuing objective of the Obama administration and the U.S. Attorney General is to punish banks and finance," writes Daivd Kotok's Cumberland Advisors, explaining a decision to underweight the banks.
    • The firm previously had been overweight the regionals via the KRE and just two weeks added exposure to the larger lenders through the KBWB, but has quickly decided to reverse that move. "We were wrong" in thinking the "persecution" of the banks was near over, says Cumberland.
    • "The investment strategy we pursued for our clients in this case was not to confront the U.S. Attorney General with an overweight position in a sector that he views as adversarial.”
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, PSP, IYF, EUFN, IAI, KIE, IPF, IAT, SEF, IYG, IAK, PFI, FXO, IXG, KBWB, PEX, KME, RKH, QABA, FINU, KCE, KRU, RWW, KBWR, FNCL, RYF, KBWI, PSCF, FEFN, AXFN, KBWP, KRS, FINZ, EMFN, KBWC, KBWX
    | 6 Comments
  • Jan. 15, 2014, 2:49 AM
    • Federal regulators have decided to ease the Volcker Rule and will allow smaller banks to hold certain CDOs of trust-preferred securities (TRuPS) that they may otherwise have had to sell.
    • The move comes after the American Bankers Association threatened to sue over the provision, which the industry group said would have forced 275 small banks to take a $600M hit to capital.
    • The change would apply to any bank that invested in TRuPS-backed CDOs that were issued by banks with under $15B in assets. There are also time conditions attached.
    • At least three lenders - Zions Bancorp (ZION) being the most prominent - had said prior to the latest ruling that they would have to write down or divest the CDOs immediately at a substantial loss. Zions has assets of $55B.
    • Related ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, SEF, IAT, IYG, PFI, FXO, KBWB, RKH, QABA, RWW, KRU, FINU, KBWR, RYF, PSCF, FNCL, KRS, FINZ
    | 3 Comments
  • Jan. 13, 2014, 5:09 AM
    | 2 Comments
  • Jan. 10, 2014, 7:10 AM
    • "I think [banks] still need to do more," says Mythili Raman, who currently heads the DOJ's Criminal Division. "It's not as it our enforcement actions are over. There's more to come, and that suggests to me that there are still banks that haven't gotten the message."
    • HSBC was let go with just a $1.9B fine last year after admitting to violations, and a similar agreement was notched with Standard Chartered. Citigroup and JPMorgan were cited for deficient controls and say they are working to fix the issues. Concerns with M&T Bank's money-laundering program has been cited by the Fed as a reason to hold up the merger with Hudson City Bancorp.
    • "Bankers don't make good junior G-men," says the ABA's Rob Rowe.
    • Raman counters that the DOJ isn't interested in going after banks for one-off slips, but instead is looking for a pattern of problematic behavior (read up on HSBC).
    • Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, PFI, FXO, KBWB, FINU, RWW, RYF, FNCL, PSCF, FINZ
    | 1 Comment
  • Jan. 5, 2014, 1:23 AM
    • Despite constant concerns about banks that are "too big too fail," the amount of assets that the U.S.'s five largest lenders control has grown to 44.2% of the total in the sector from 43.5% in 2012, a report from provider SNL Financial shows.
    • In 2007, the figure was 38.4% and in 1990 it was just 9.67%.
    • The banking operations of JPMorgan (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and U.S. Bancorp (USB) held $6.46T in assets as of Q3 2013.
    • The easing of regulation, which gained momentum in the 1990s, encouraged consolidation in the sector, as did the government pushing stronger banks to buy those that were about to collapse - or did collapse - because of the financial crisis in 2008.
    • ETFs: FAS, XLF, FAZ, UYG, KRE, VFH, KBE, IYF, SEF, IAT, IYG, PFI, FXO, KBWB, KME, RKH, QABA, KRU, FINU, RWW, KBWR, RYF, PSCF, FNCL, KRS, FINZ
    | 12 Comments
  • Dec. 29, 2013, 5:58 AM
    • Regulators are considering whether it would be "appropriate and consistent" with the Volcker Rule to allow smaller banks to hold certain CDOs of trust-preferred securities that they may otherwise have to sell. Authorities plan to make a ruling by January 15.
    • The news comes after the American Bankers Association threatened to sue over the provision, which the industry group says would force 275 small banks to take a $600M hit to capital.
    • At least three lenders - Zions Bancorp (ZION) being the most prominent - have said they would have to write down or divest such assets immediately at a substantial loss.
    • Related ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, SEF, IAT, IYG, PFI, FXO, KBWB, RKH, QABA, RWW, KRU, FINU, KBWR, RYF, PSCF, FNCL, KRS, FINZ
    | Comment!
  • Dec. 23, 2013, 2:41 PM
    • The financial harm is "real, imminent, and irreparable," says the American Bankers Association of a Volcker Rule provision restricting bank ownership of certain CDOs of trust-preferred securities. At least three smaller lenders - Zions Bancorp (ZION +1.8%) being the most prominent - have said they would have to write down or sell such assets immediately at a substantial loss.
    • It's an accounting issue: If these assets are covered by Volcker, lenders must move them from the held-to-maturity bin to the available-for-sale bin, and take the necessary marks in the process.
    • "Banking entities investing in pooled Trups that do not pose the kind of systemic risk the Volcker rule is intended to capture are facing unexpected and precipitous write-downs on these investments that are not justified by any safety and soundness concern," says the ABA. "The effect of the Volcker rule on banking entities holding these investments is itself causing safety and soundness concerns." Unintended consequences? Who could have guessed?
    • Related ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, SEF, IAT, IYG, PFI, FXO, KBWB, RKH, QABA, RWW, KRU, FINU, KBWR, RYF, PSCF, FNCL, KRS, FINZ
    | 2 Comments
  • Dec. 17, 2013, 4:19 AM
    | 3 Comments
  • Dec. 11, 2013, 10:02 AM
    | Comment!
  • Dec. 11, 2013, 4:13 AM
    • The board of the Federal Deposit Insurance Corp. (FDIC) has authorized a draft plan on how the agency would break up large financial firms that are about to collapse and without a taxpayer bailout.
    • The FDIC has the authority to take over failing banks under the 2010 Dodd-Frank rule in order to limit the impact of any collapse on the financial system; the regulator would keep the operating parts of an institution open, prioritize creditor repayments - although this includes imposing losses as well - and it would recapitalize a firm.
    • The agency is now seeking public comment on the plan.
    • ETFs: FAS, XLF, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, RWW, FINU, RYF, PSCF, FNCL, FINZ
    | 1 Comment
Visit Seeking Alpha's
RYF vs. ETF Alternatives
RYF Description
Seeks to replicate as closely as possible, before expenses, the performance of the S&P Equal Weight Index Financials.
See more details on sponsor's website
Sector: Financial
Country: United States
ETF Hub
Find the right ETFs for your portfolio: Visit Seeking Alpha's ETF Hub