IAK - IYF: Deposit Beta Kicks In But Things Still Good For Insurance
2024-06-05 17:13:43 ET
Summary
- iShares U.S. Financials ETF benefits from higher rates, but credit problems could have an impact on banking stocks if they came to pass.
- M&A activity is improving for full-service banks, while higher rates lead to better performance on reserve portfolios for insurance companies.
- The iShares U.S. Insurance ETF may be a better pick to avoid direct consequences of credit issues in the financial sector, and the mixed effects in general financial services.
The iShares U.S. Financials ETF ( IYF ) is a broad portfolio value-weighted in the subset of US financials, so banks and insurance companies. Deposit beta is kicking in for the banks, so there is no longer much incremental benefit from higher rates. M&A is improving for full-service banks. Higher rates mean better performance on reserve portfolios at insurance companies as well....
IYF: Deposit Beta Kicks In, But Things Still Good For Insurance