Bill Gross Sees 'Extraordinary Long-Term Value' in Regional Banks: 3 ETFs To Watch

Legendary investor, fund manager and PIMCO co-founder Bill Gross sees extraordinary long-term value in regional banks.

In a tweet posted on Oct. 30, Gross said he sees regional bank stocks as a “falling knife” that “hasn't hit ground yet“.

Back in April, the Bond King had bought four beaten-down regional bank stocks trading at 60% to book value:

• Western Alliance Bancorp. WAL
• Synovus Financial Corp. SNV
• PacWest Bancorp PACW
• SPDR S&P Regional Banking ETF KRE

Gross sold off 80% of that holding in July making “mucho bucks” on them.

The billionaire has again indicated an appetite for regional banks, saying he would be “waiting just a little bit more to own some of these at 60% book and 7% yields.”

Also Read: Regional Banks: Navigating A Goldilocks Scenario Amid Market & Geopolitical Challenges

We highlight three regional bank ETFs that you could keep on your watch list and consider when they touch bottom:

The SPDR S&P Regional Banking ETF KRE

Trading since 2006, the SPDR S&P Regional Banking ETF KRE tracks the performance of the S&P Regional Banks Select Industry Index. The fund has an expense ratio of 0.35% and has 49.76% of its portfolio invested in mid-cap regional banks, which large caps commanding a 12.2%. Small-cap regional bank stocks command a good 33.69% of this fund’s portfolio:

Symbol	Holding	% Assets
TFC	Truist Financial Corporation	3.26%
MTB	M&T Bank Corporation	3.16%
FHN	First Horizon Corporation	3.07%

KRE is down about 32% for the year, trading at $39.64. The ETF has 52-week low of $34.52.

The iShares U.S. Regional Banks ETF IAT

Launched in 2006, the iShares U.S. Regional Banks ETF IAT tracks the performance of the Dow Jones U.S. Select Regional Banks Index. The fund has an expense ratio of 0.40% and has 61.14% of its portfolio invested in large-cap regional banks, which mid-caps coming in next at 38.71%.

Top three holdings of the fund include:

Symbol	Holding	% Assets
USB	U.S. Bancorp	14.28%
PNC	PNC Financial Services Group, Inc.	13.26%
TFC	Truist Financial Corporation	11.01%

IAT is down about 34% for the year, trading at $31.65. The ETF has a 52-week low of $28.80.

The Invesco KBW Regional Banking ETF KBWR

Trading since 2011, the Invesco KBW Regional Banking ETF KBWR tracks the performance of the KBW Nasdaq Regional Banking Index. The fund has an expense ratio of 0.35% and has 54.68% of its portfolio invested in mid-cap regional banks, which large caps commanding a 45.26%.

Top three holdings of the fund include:

Symbol	Holding	% Assets
WBS	Webster Financial Corporation	3.93%
CFR	Cullen/Frost Bankers, Inc.	3.88%
CBSH	Commerce Bancshares, Inc.	3.68%

KBWR is down about 26% for the year, trading at 41.83. The ETF has a 52-week low of $37.49.

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