Designed to provide broad exposure to the Financials - Regional Banks segment of the equity market, the iShares U.S. Regional Banks ETF (IAT) is a passively managed exchange traded fund launched on May 1, 2006.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $646.82 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Regional Banks segment of the equity market. IAT seeks to match the performance of the Dow Jones U.S. Select Regional Banks Index before fees and expenses.
The Dow Jones U.S. Select Regional Banks Index is a free-float adjusted market capitalization-weighted index which measures the performance of the regional bank sub-sector of the U.S. equity market.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector -- about 100% of the portfolio.
Looking at individual holdings, Us Bancorp (USB) accounts for about 14.18% of total assets, followed by Pnc Financial Services Group Inc (PNC) and Truist Financial Corp (TFC).
The top 10 holdings account for about 68.95% of total assets under management.
Performance and Risk
The ETF has added about 10.92% and it's up approximately 18.75% so far this year and in the past one year (as of 02/12/2026), respectively. IAT has traded between $39.71 and $62.82 during this last 52-week period.
The ETF has a beta of 0.94 and standard deviation of 29.73% for the trailing three-year period, making it a high risk choice in the space. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
iShares U.S. Regional Banks ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IAT is a reasonable option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco KBW Regional Banking ETF (KBWR) tracks KBW Nasdaq Regional Banking Index and the State Street SPDR S&P Regional Banking ETF (KRE) tracks S&P Regional Banks Select Industry Index. Invesco KBW Regional Banking ETF has $52.76 million in assets, State Street SPDR S&P Regional Banking ETF has $4.66 billion. KBWR has an expense ratio of 0.35%, and KRE charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares U.S. Regional Banks ETF (IAT): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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