How Do Relative Returns of JPM and BAC Compare?



J.P. Morgan has outperformed Bank of America YTD

Shares of Bank of America (BAC) have underperformed the financial sector, as well as broad markets in 2016 so far. 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. Year-to-date the financial sector has lost 2%, while SPY has gained 5%. J.P. Morgan (JPM) has outperformed Bank of America year-to-date and has gained 1.5%. Comparatively, shares of Bank of America have fallen ~13% YTD. In 2015, shares of J.P. Morgan gained 5.6% while Bank of America lost 20%.

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Performance of peers

Since the beginning of 2016, the financial sector has been on a roller coaster ride due to fears of a global recession and a low interest rate outlook. Banks entered 2016 expecting four rounds of rate hikes. However, things haven’t turned out in their favor. Macroeconomic uncertainty has led to delays in subsequent rate hikes, which has further weighed on banking stocks.

Year-to-date, shares of Goldman Sachs (GS), Wells Fargo (WFC), and Citigroup (C) have also generated negative returns. These stocks are down 13%, 13%, and 16%, respectively.

ETF exposure

Investors looking for ETF exposure to Bank of America (BAC) and J.P. Morgan could invest in the iShares U.S. Financial Services ETF (IYG) or the SPDR Financial Select Sector ETF (XLF).


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