FTXO - 3 Banking ETFs to watch as the yield curve flattens

As the yield curve continues to flatten, pressure mounts for banking and financial exchange traded funds. Tighter spreads are not supportive of bank stocks' bottom lines, leading to three banking ETFs that investors may want to keep on their radar. The First Trust Nasdaq Bank ETF (NASDAQ:FTXO), Invesco KBW Bank ETF (NASDAQ:KBWB), and the SPDR S&P Bank ETF (NYSEARCA:KBE) will be in the crosshairs as the curve flattens. This is because banks traditionally perform worse in situations where shorter-term rates and longer-term rates become more level. Financial institutions generate a spread on lending loans, which is a large portion of how they earn revenues. Therefore, if the difference between short- and long-term rates is narrower, it equates to less profit for the banks. Below is a chart of the U.S. 2 Year and 10 Year Treasury yields over the past year.  Investors can see the narrowing between the two as the

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3 Banking ETFs to watch as the yield curve flattens