KBWR - Banking crisis has led to explosion in trading volume for regional bank ETF KRE

2023-05-08 14:47:55 ET

The latest banking crisis has spurred enormous trading volume in the world's largest exchange traded fund focused on the regional bank sector. The SPDR S&P Regional Banking ETF ( NYSEARCA: KRE ), with its $2.82B assets under management, has seen days where its trading volume jumped above 100M, a level never seen before in the fund’s history.

From May 8 of 2022 through March 1 of 2023, KRE never experienced daily trade volumes higher than 16M shares. Since March 1, the exchange traded fund has averaged volume of 35M shares with peak days that included 117M, 97M and 94M. Overall, KRE has seen 15 days with volume north of 50M.

This frenzied activity came as the sector experienced the initial bank crisis in March, along the aftermath that has continued into May. Since March 1, KRE has plummeted 38.2% .

See below a one-year trading chart for KRE and the highlighted boom of trading activity that started after March 1, along with the fund's collapse in value.

Outside of the spike in volume, KRE also noticed an exodus in capital flows. The ETF watched investors pull $782M from the fund in the period starting March 1.

Additionally, KRE is not the only regional banking-based ETF to notice a spike in trading activity. Three other funds with similar patterns include the iShares U.S. Regional Banks ETF ( IAT ), Invesco KBW Regional Banking ETF ( KBWR ) and the leveraged Direxion Daily Regional Banks Bull 3X Shares ( DPST ).

More on the Regional Banking Crisis:

• PacWest leads regional bank stocks higher after dividend cut, bank deposit trends
• Regional bank ETFs hit multi-year lows as PACW, WAL and FHN tank
• Cathie Wood thinks regional bank fallout is accelerating
• With FRC's collapse, here are the top 10 regional bank stocks, ranked by SA Quant Ratings

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