Market Overview

S&P Bullish On Two Bank ETFs (IYG, KBWB)

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Despite a disappointing April that saw the S&P 500 endure a small loss, data from S&P Capital IQ indicate nearly 610 ETFs had positive year-to-date returns through the first four months of the year, a number that includes 23 funds that were up more than 20% through the end of April.

Among the ETFs with a domestic bias that are up more than 20% so far in 2012, S&P Capital IQ gives Overweight ratings to the iShares Dow Jones U.S. Financial Services Index Fund (NYSE: IYG) and the PowerShares KBW Bank Portfolio (NYSE: KBWB). IYG is up more than 21% year-to-date while KBWB is up nearly 23.5%.

As of early May 2012, S&P Capital IQ is providing an Overall Ranking on 665 equity ETFs, with 167 of them receiving an overall appraisal of Overweight, the firm said in a research note. Twelve of the ETFs receiving an Overall Ranking of Overweight had a 12-month yield of more than 3%, while 17 of them had a yield of less than 1%, S&P added.

Home to 112 stocks, an expense ratio of 0.47% and almost $310 million in assets under management, IYG devotes 24% of its weight to Wells Fargo (NYSE: WFC) and Dow component J.P. Morgan Chase (NYSE: JPM) combined. Citigroup (NYSE: C), Bank of America (NYSE: BAC) and Visa (NYSE: V) are the ETF's other top-five holdings.

KBWB holds just 24 stocks, but is cheaper than its iShares rival with expenses of 0.35%. The PowerShares fund has $32.1 million in AUM. J.P. Morgan Chase, Wells Fargo, BofA, Citi and U.S. Bancorp (NYSE: USB) combine for over a third of KBWB's weight.

The note also indicates S&P Capital IQ has an Overweight rating on the Market Vectors India Small-Cap ETF (NYSE: SCIF), which was the top-performing equity-based ETF in the first quarter. In the first quarter, SCIF was up 34%, but following a rough April, the fund is now up 26.1% on a year-to-date basis. The rival EGShares India Small Cap ETF (NYSE: SCIN) is up nearly 19% this year.

For more on ETFs that are up 20% or more this year, please click HERE.

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