What are bank ETFs?
Bank ETFs own shares of banks: companies that take deposits and make loans, and in some cases also earn fees from trading and deal-making. The larger funds lean on household names. Bank of America, JPMorgan Chase and Wells Fargo each appear in at least two of the four largest funds, at around 7% to 8% of assets. Citigroup, PNC, U.S. Bancorp, Truist and M&T Bank also show up in at least two.
The funds differ more than their names suggest. Invesco's KBWB tracks the KBW Nasdaq Bank Index with just 24 stocks and keeps 61.5% in its top 10, led by Morgan Stanley and Goldman Sachs. First Trust's FTXO tracks the Nasdaq US Smart Banks Index and is similarly concentrated, at 58.1%. SPDR's KBE spreads its money across 103 stocks, with only 10.5% in its top 10. GSIB, from Themes ETF, aims for growth of capital with 28 global banks deemed systemically important, meaning big enough that their failure could shake the financial system. Banco Santander and Royal Bank of Canada lead it. BNKU and BNKD, from BMO Financial Group, are exchange-traded notes (debt that pays an index's return) offering leveraged bets for and against big US banks.
Costs sit close together. The median expense ratio, the yearly fee taken as a share of the money invested, is 0.35%. KBWB, KBE and GSIB all charge that amount, while FTXO charges 0.60%.
The money is concentrated, too. With so few funds, the five largest hold all of the group's roughly $7.1 billion, and KBWB alone holds about $5.3 billion of it. KBE is next, at about $1.5 billion.
Bank ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 4 biggest bank ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| Bank of America Corp. | 2 of 4 | 7.76% |
| JPMorgan Chase & Co. | 2 of 4 | 7.47% |
| Wells Fargo & Co. | 2 of 4 | 7.13% |
| Citigroup Inc. | 2 of 4 | 4.28% |
| PNC Financial Services Group, Inc. (The) | 2 of 4 | 3.9% |
| U.S. Bancorp | 2 of 4 | 3.76% |
| M&T Bank Corp. | 2 of 4 | 3.73% |
| Truist Financial Corp. | 2 of 4 | 3.66% |
| State Street Corp. | 2 of 4 | 3.6% |
| Bank of New York Mellon Corp. (The) | 2 of 4 | 3.59% |
| Huntington Bancshares Inc. | 2 of 4 | 3.2% |
| Fifth Third Bancorp | 2 of 4 | 3.19% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest bank ETFs, side by side
Swipe the table to see all 4 funds.
| KBWB | KBE | FTXO | GSIB | |
|---|---|---|---|---|
| Net assets | $5.32B | $1.48B | $301.8M | $27.4M |
| Expense ratio | 0.35% | 0.35% | 0.6% | 0.35% |
| Holdings | 24 | 103 | 50 | 28 |
| In the 10 largest | 61.54% | 10.46% | 58.14% | 36.24% |
| Biggest holding | Morgan Stanley (9.36%) | Rocket Cos Inc (1.17%) | Citigroup Inc (8.98%) | Banco Santander SA (3.7%) |
| Yield | 2.1% | 2.24% | 1.94% | 1.67% |
| 1-year return | +17.4% | +17.1% | +16.8% | +27.3% |
| 3 years, a year | +37.5% | +27.2% | +30.8% | — |
| 5 years, a year | +7.5% | +6.7% | +5.9% | — |
| Worst drop, past year | -16.4% | -14.6% | -16.7% | -13.9% |
| Launched | 2011 | 2005 | 2016 | 2023 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
KBWB vs KBE
KBWB packs its money into 24 stocks, with 61.5% in its top 10 and Morgan Stanley the largest at 9.4%. KBE holds 103 stocks with just 10.5% in its top 10; its biggest position, Rocket Cos, is 1.2%. Only 19.5% of their assets overlap. Both charge 0.35% a year. In the year to October 27, 2026, KBWB gained 17.4% and KBE 17.1%, and their worst drops from a peak were 16.4% and 14.6%. KBWB may suit investors who want a concentrated bet on big banks; KBE, those who want a wide spread of banks.
KBWB vs FTXO
These two have the most in common: 61.7% of their assets sit in the same stocks, including Bank of America, JPMorgan Chase and Wells Fargo. KBWB holds 24 stocks, with 61.5% in its top 10 and Morgan Stanley largest at 9.4%. FTXO holds 50, with 58.1% in its top 10 and Citigroup largest at 9.0%. FTXO costs 0.60% a year against KBWB's 0.35%. In the year to October 27, 2026, KBWB gained 17.4% and FTXO 16.8%, with worst drops of 16.4% and 16.7%. Investors comparing them may weigh FTXO's different index against its higher fee.
KBE vs GSIB
These two barely overlap: only 4.8% of their assets are in common. KBE spreads its money across 103 stocks, with 10.5% in its top 10, led by US firms such as Rocket Cos and Nicolet Bankshares. GSIB holds 28 big banks worldwide, with 36.2% in its top 10, led by Banco Santander at 3.7% and Royal Bank of Canada. Both charge 0.35%. In the year to October 27, 2026, GSIB gained 27.3% and KBE 17.1%, with worst drops of 13.9% and 14.6%. GSIB is small, at about $27 million, and may suit investors looking beyond US banks.
How much do the largest bank ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
| Funds | Assets in common | Shared holdings | |
|---|---|---|---|
| KBWB and FTXO | 61.7% | 17 | |
| KBE and FTXO | 40.3% | 50 | |
| KBWB and GSIB | 28% | 8 | |
| KBWB and KBE | 19.5% | 20 | |
| FTXO and GSIB | 14% | 4 | |
| KBE and GSIB | 4.8% | 5 |
From each fund’s full holdings in its latest N-PORT report.
How have bank ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
Best-performing bank ETFs over the past year
| # | Fund | Net assets | Cost | 1 mo | YTD | 1 yr | 3 yr |
|---|---|---|---|---|---|---|---|
| 1 | GSIB Themes Global Systemically Important Banks ETF | $27.4M | 0.35% | -6.0% | +13.8% | +27.3% | — |
| 2 | KBWB Invesco KBW Bank ETF | $5.32B | 0.35% | -1.5% | +6.8% | +17.4% | +37.5% |
| 3 | KBE SPDR S&P Bank ETF | $1.48B | 0.35% | +1.1% | +10.7% | +17.1% | +27.2% |
| 4 | FTXO First Trust Nasdaq Bank ETF | $301.8M | 0.6% | -0.1% | +6.7% | +16.8% | +30.8% |
Funds with at least $25 million in net assets; leveraged and inverse funds left out. Past returns don’t predict future returns.
How bank ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| KBWB | not yet launched | -48.0% | -28.8% |
| KBE | -81.0% | -48.8% | -17.6% |
| FTXO | not yet launched | -49.8% | -22.1% |
| GSIB | not yet launched | not yet launched | not yet launched |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives bank ETFs?
Most bank profits come from net interest income: the gap between what a bank earns on loans and bonds and what it pays on deposits. Interest rates move that gap. The economy drives loan demand and loan losses, which climb in recessions as more borrowers fall behind. Regulators set how much capital banks must hold, which limits lending and payouts. Many banks also earn noninterest income, such as fees from trading, advice and card payments, which rise and fall with markets and spending. Confidence matters too: deposits that leave quickly can sink a bank.
In past downturns, these funds usually fell further than the broad market. In the 2008 financial crisis, KBE fell 81%, against 55.2% for the S&P 500. In the 2020 COVID-19 crash, KBWB, KBE and FTXO each fell about 48% to 50%, against 33.7%. The 2022 bear market was different: KBE fell 17.6% and FTXO 22.1%, less than the S&P 500's 24.5%, while KBWB fell 28.8%. Higher interest rates weigh on many stocks but can widen banks' lending margins, so rate-driven downturns can play out differently for banks. GSIB is too new to have been through these downturns.
Bank ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | KBWB Invesco KBW Bank ETF | 0.35% | $35 a year | $5.32B |
| 2 | KBE SPDR S&P Bank ETF | 0.35% | $35 a year | $1.48B |
| 3 | GSIB Themes Global Systemically Important Banks ETF | 0.35% | $35 a year | $27.4M |
| 4 | FTXO First Trust Nasdaq Bank ETF | 0.6% | $60 a year | $301.8M |
Ordinary funds with at least $10 million in net assets. The median ordinary bank ETF charges 0.35% a year; leveraged and inverse funds usually charge more.
Do bank ETFs pay dividends?
4 of the 4 ordinary bank ETFs with a page here paid distributions over the last 12 months, with a median yield of 1.94%.
| Highest yields | Yield | Net assets |
|---|---|---|
| KBE SPDR S&P Bank ETF | 2.24% | $1.48B |
| KBWB Invesco KBW Bank ETF | 2.1% | $5.32B |
| FTXO First Trust Nasdaq Bank ETF | 1.94% | $301.8M |
| GSIB Themes Global Systemically Important Banks ETF | 1.67% | $27.4M |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a bank ETF
- Fees are mostly the same. KBWB, KBE and GSIB each charge 0.35% a year, the group's median. FTXO charges 0.60%. That gap looks small, but fees come out every year, so it compounds over a long holding period.
- A few giants or a long list. KBWB puts 61.5% of its money in its top 10 of 24 stocks, and FTXO 58.1% in its top 10 of 50. KBE holds 103 stocks and its top 10 make up just 10.5%, so no single company dominates.
- Which index sets the rules. KBWB tracks the KBW Nasdaq Bank Index and FTXO the Nasdaq US Smart Banks Index, yet 61.7% of their assets overlap. KBE tracks an index of big national banks and leading regional banks. GSIB's stated goal is growth of capital.
- US banks or global banks. GSIB holds banks from around the world, led by Banco Santander, Royal Bank of Canada, ING and Toronto-Dominion Bank. The largest holdings of KBWB, KBE and FTXO are US companies. GSIB and KBE share just 4.8% of their assets.
- Size and track record. KBWB has about $5.3 billion and dates to 2011; KBE, about $1.5 billion, to 2005. GSIB holds about $27 million and launched in December 2023. Smaller funds can cost more to trade and are likelier to close.
- Leveraged notes behave very differently. BNKU and BNKD are BMO exchange-traded notes offering leveraged bets for and against big US banks. In the year to October 27, 2026, BNKU gained 15.6%, less than unleveraged KBWB's 17.4%, while BNKD lost 46.4%.
What are the risks of bank ETFs?
- Heavy bets on a handful of banks. KBWB keeps 61.5% of its money in 10 stocks, led by Morgan Stanley at 9.4%. FTXO keeps 58.1% in its top 10, led by Citigroup at 9.0%. Trouble at one or two big banks can hit these funds hard.
- Deep falls in financial crises. These funds have fallen harder than the market in sharp crises. KBE dropped 81% in 2008, against 55.2% for the S&P 500. In the 2020 crash, KBWB, KBE and FTXO fell about 48% to 50%, against 33.7%.
- Rates, loan losses and bank runs. Bank profits hinge on interest-rate spreads and borrowers repaying. Recessions raise loan losses, and fleeing depositors can sink a bank fast. In the year to October 27, 2026, the four ETFs fell 13.9% to 16.7% at their worst.
- Leveraged notes can lose fast. BNKU and BNKD swung wildly: volatility, a measure of price swings, was near 60% in the year to October 27, 2026, against 18% to 20% for the ETFs. BNKD fell as much as 65.1%; BNKU, 41%.
- ETNs depend on the issuer. BNKU and BNKD are notes, a form of unsecured debt from BMO Financial Group, not funds that own bank shares. If BMO could not pay, holders could lose money even if bank stocks rose.
Leveraged and inverse bank ETFs (2x)
These funds aim for a multiple, or the opposite, of one day’s return, and reset every day. Held for longer than a day, their results can drift far from that multiple, especially when prices swing. They are trading tools, not long-term holdings. Why leveraged ETFs decay →
List of all bank ETFs, by size
| # | Fund | Net assets | Cost | Yield | YTD | 1 yr | 5 yr |
|---|---|---|---|---|---|---|---|
| 1 | KBWB Invesco KBW Bank ETF | $5.32B | 0.35% | 2.1% | +6.8% | +17.4% | +7.5% |
| 2 | KBE SPDR S&P Bank ETF | $1.48B | 0.35% | 2.24% | +10.7% | +17.1% | +6.7% |
| 3 | FTXO First Trust Nasdaq Bank ETF | $301.8M | 0.6% | 1.94% | +6.7% | +16.8% | +5.9% |
| 4 | GSIB Themes Global Systemically Important Banks ETF | $27.4M | 0.35% | 1.67% | +13.8% | +27.3% | — |
Questions investors ask about bank ETFs
What is the largest bank ETF?
KBWB, the Invesco KBW Bank ETF, is the largest, with about $5.3 billion in net assets. It tracks the KBW Nasdaq Bank Index, holds 24 stocks and has traded since November 2011. Its biggest holdings are Morgan Stanley, Goldman Sachs, Bank of America, JPMorgan Chase and Wells Fargo. SPDR's KBE is next, with about $1.5 billion.
What is the cheapest bank ETF?
KBWB, KBE and GSIB tie for the lowest expense ratio, at 0.35% a year. KBWB is by far the largest of the three, while GSIB is the smallest, at about $27 million. FTXO costs more, at 0.60%. Because these low-cost funds hold very different things, from a few big US banks in KBWB to global banks in GSIB, cost is only one part of the comparison.
KBWB vs KBE: what's the difference?
The main difference is concentration. KBWB holds 24 stocks, with 61.5% in its top 10 and Morgan Stanley largest at 9.4%. KBE holds 103, and its top 10 make up just 10.5%. Only 19.5% of their assets overlap. Both charge 0.35%. In the year to October 27, 2026, KBWB gained 17.4% and KBE 17.1%. KBE's yield was a little higher on that date, 2.24% against 2.1%.
Do bank ETFs pay dividends?
Yes. All four bank ETFs pay dividends. As of October 27, 2026, KBE yielded 2.24%, KBWB 2.1%, FTXO 1.94% and GSIB 1.67%, a median of 1.94%. A yield is a fund's dividends as a share of its price, so it moves as prices and payouts change. Banks pay dividends from profits, and regulators can limit those payouts when banks are under strain.
Which bank ETFs hold Bank of America and JPMorgan?
KBWB and FTXO both count Bank of America and JPMorgan Chase among their five largest holdings. Bank of America makes up 7.8% of KBWB and 8.1% of FTXO; JPMorgan Chase makes up 7.5% and 7.7%. Wells Fargo sits at about 7% in both. KBE spreads its money so widely that no holding is above about 1.2%, and GSIB's five largest positions are all non-US banks, led by Banco Santander.
How many bank ETFs are there?
This guide covers six US-listed bank funds. Four are ETFs: KBWB from Invesco, KBE from SPDR, FTXO from First Trust and GSIB from Themes ETF. The other two, BNKU and BNKD, are exchange-traded notes from BMO Financial Group that offer leveraged bets on big US banks. None of the six comes from Vanguard. Together, the four ETFs hold roughly $7.1 billion.
Is there a leveraged bank ETF?
Yes, in the form of exchange-traded notes. BNKU and BNKD, from BMO Financial Group, launched in February 2025. BNKU is a leveraged bet that big US bank stocks will rise; BNKD is a leveraged bet that they will fall. Products like these typically target a multiple of an index's daily move, so results over months can stray far from that multiple. In the year to October 27, 2026, BNKD lost 46.4% and BNKU gained 15.6%. They are built as short-term trading tools and depend on BMO's ability to pay.
Is there a bank ETF for Canadian or European banks?
GSIB, the Themes Global Systemically Important Banks ETF, holds both, among 28 big banks from around the world. Its largest holdings include Banco Santander, Royal Bank of Canada, ING, Toronto-Dominion Bank and Standard Chartered, each about 3.6% to 3.7% of assets. It charges 0.35% and gained 27.3% in the year to October 27, 2026. It is small, at about $27 million, and launched in December 2023.
Is there a Vanguard, Fidelity or Schwab bank ETF?
No. None of the three offers a bank ETF. The largest bank ETFs come from Invesco (KBWB), SPDR (State Street) (KBE) and First Trust (FTXO), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts. For a broader fund, VFH (Vanguard Financials ETF) and FNCL (Fidelity MSCI Financials Index ETF) are covered in our financials ETF guide.
