An ETF that tracks some of America’s small to mid-size banks showed some signs of resilience today despite having holdings in collapsed banks SVB and Signature.
The iShares US Regional Banks ETF (IAT), which had previously closed at US$41.40 was down 16% in early trades but rallied later as investors mulled over the health of the US's smaller and specialised banks.
Silicon Valley Bank, whose collapse has hit bank stocks globally, made up 3.2% of the ETF’s portfolio before the stock was suspended from trading.
IAT is also exposed to First Republic which sank by more than 75% today.
The San Francisco bank previously made up 4.31% of the ETF's portfolio.
Additionally, 1% was attributed to the failed Signature Bank which collapsed on Sunday in the aftershock of the SVB insolvency.
Arizona’s Western Alliance bank, which was down over 57% on Monday, is also represented by the ETF.
The ETF’s largest holding is PNC Financial Services (NYSE:PNC) which makes up 12.8% of the portfolio.
The Pittsburgh-based bank fell by 3.5% today, a small fall compared to other regional counterparts.
Another regional bank-focused ETF, BlackRock Future Financial & Technology (BPAY), was also relatively steady despite holding both of the recently failed lenders.
Signature accounted for 3.7% of the portfolio while BPAY was the most exposed ETF to SVB having 4.3% of its portfolio matched with the New York bank.
On Friday, when news broke about SVB, the ETF’s value dropped by 5% and on Monday it was down by a further 3.6%