How Does Bank of America’s YTD Performance Stand up Next to Peers?



Stock performance

So far in 2016, shares of Bank of America (BAC) have underperformed the financial sector and broad markets. Remember, the Financial Select Sector SPDR ETF (XLF) represents the financial sector, while the S&P 500 SPDR ETF (SPY) represents the S&P 500 Index.

Specifically, as of June 5, 2016, the financial sector has lost 1.3% YTD (year-to-date), while SPY has gained 2.7%. By comparison, Bank of America has shed 14.8% during the year so far.

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Performance of peers

As of June 5, the financial sector has been on a YTD rollercoaster ride driven by fears of a global recession and the low interest rate outlook. Banks entered 2016 expecting four rounds of rate hikes. But things have not turned out in their favor. Macroeconomic uncertainty has led to delays in subsequent rate hikes, which has weighed even more on banking stocks. 

YTD, shares of major banks including Wells Fargo (WFC), Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C) have generated negative returns. Specifically, Wells Fargo has lost 11.3% while Goldman Sachs, JPMorgan Chase, and Citigroup have declined by 26%, 4%, and 12.3%, respectively.

ETF exposure

Investors looking for ETF exposure to Bank of America (BAC) might consider in the iShares US Financial Services ETF (IYG) or the SPDR Financial Select Sector ETF (XLF) to divest risk. IYG invests 8.03% of its portfolio in Bank of America. XLF invests 5.4%.


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