News that the US government is putting together a comprehensive rescue plan caused the Dow Jones US Bank Index to climb over 30% last Thursday and the index held the gains on Friday.
The proposed plan will give Treasury a blank check to buy troubled assets from banks, effectively restoring their balance sheets and stabilizing the industry.
The Dow Jones U.S. Regional Banks Index Fund (IAT) tracks 79 banks that hold 5% or less of the assets in the Dow Jones US Bank Index. The largest holding is US Bancorp(USB) at over 18% of the fund.
The KBW Regional Banking ETF (KRE) with 59 banks, is a more diversified fund. The largest holding, First Commonwealth Financial (FCF), represents only 3% of the ETF.
The KBW Bank ETF (KBE) owns 26 mostly large banks. The largest holding is Wells Fargo (WFC) at 10%.