A number of exchange-traded funds (ETFs) track the banking sector. Among them are ProShares Ultra KBW Regional Banking, ProShares UltraPro Short Financials, ProShares UltraPro Financials, Direxion Daily Financial Bull 3X Shares and Direxion Daily Financial Bear 3X Shares.
ProShares is a leading company offering leveraged ETFs that track a variety of sectors. Alternative ETFs, such as those offered by ProShares, provide investors with the opportunity to decrease risk and volatility, and the opportunity to maintain a speculative position without the obligation of purchasing derivatives.
ProShares Ultra KBW Regional Banking (KRU)
This fund seeks results that track two times that of the daily performance of the KBW Regional Banking index. The KRU fund invests in both derivatives and securities that ProShare advisors believe will provide investors with twice the daily returns of the index. The index, which is non-diversified, comprises 50 stocks of companies that conduct business as regional banks or thrifts. Some of this fund’s top holdings as of 2015 include First Niagara Financial Group, Investors BanCorp and SVB Financial Group.
ProShares UltraPro Short Financials (FINZ)
This fund aims to achieve three times the opposite, or inverse, of the daily performance of the Dow Jones U.S. FinancialsSM Index. This non-diversified fund makes investments in derivatives that, in combination, provide investors with a return based on declines in the value of the Dow financial index, which measures the overall financial services sector performance in the U.S. equity market.
ProShares UltraPro Financials (FINU)
The investment seeks daily investment results, before fees and expenses, that correspond to three times (3X) the daily performance of the Dow Jones U.S. FinancialsSM Index. The fund invests in securities and derivatives designed to have similar daily returns to three times (3X) the daily return of the index. This fund is non-diversified, and its primary holdings as of 2015 include Berkshire Hathaway and Wells Fargo.
ProShares Ultra Financials (UYG)
This leveraged ETF provides daily investment results that correspond to two times (2X) the daily performance of the Dow Jones U.S. FinancialsSM Index. The fund invests in securities and derivatives chosen to mirror this primary index for tracking the financial sector. While the financial sector includes industries besides the banking industry, banks are a major component of the sector and, thus, the index as well. Primary holdings of this ETF as of 2015 include JPMorgan Chase and Wells Fargo.
Direxion Daily Financial Bull 3X Shares (FAS)
The Direxion Financial Bull 3X fund is designed to have daily investment results equal to 300% of the performance of the Russell 1000 Financial Services Index. The fund creates long positions by investing at least 80% of its assets in the securities that make up the Russell 1000 Financial Services Index or in financial instruments that provide leveraged or unleveraged exposure to the index. These financial instruments include futures contracts, options on securities, indexes, swap agreements and contracts for differences (CFDs).
Direxion Daily Financial Bear 3X Shares (FAZ)
This ETF aims for daily investment results that approximate 300% of decreases in the performance of the Russell 1000 Financial Services Index. This fund creates short positions by investing at least 80% of its assets in futures contracts, options on securities, swap agreements and other financial instruments that, in combination, provide inverse leveraged exposure to the Russell 1000 Financial Services Index.