Regional Bank ETF Index Gets Component Change

We might be seeing a rash of financial index component changes down the line that will affect their exchange traded funds (ETFs) as the uncertainty of our banking system continues.

For now, the underlying index of the KBW Regional Banks (KRE) fund will have some changes. This ETF has managed to fare pretty well in the wake of the larger financial turmoil. Regional banks have also benefited from minimal exposure to the subprime crisis.

MarketWatch reports that these changes will be effective today:

• Sovereign Bancorp (SOV) will be deleted from the index. All three major rating agencies said on Tuesday that they may raise their ratings after Banco Santander of Spain said it would buy the U.S.-based savings and loan, reports Karen Brettell for Reuters.
• Hancock Holding Corp. (HBHC) will be added. HBHC provides a number of financial and banking products to small and middle market businesses in Mississippi, Louisiana, Florida, and Alabama.

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