#bank-profitability

#bank-profitability

XLF functions as a pure play on the financial sector's health. You profit when banks earn more from lending, when insurers price risk profitably, and when payment networks capture transaction volume. The fund's top two positions - Berkshire Hathaway () and JPMorgan Chase () - represent nearly a quarter of total assets, creating meaningful single-name exposure despite the ETF wrapper. Payment networks like Visa () and Mastercard () add diversification within financials.

I think the government should be thoughtful about signals it sends to investors who are looking at the UK as a long-term home for capital.

At the end of the second quarter, the average U.S. bank paid depositors an annual interest rate of 2.2%, according to Federal Deposit Insurance Corporation data. This is higher than the 0.2% rate two years ago but well below the Fed's 5.5% overnight rate. JPMorgan Chase and Bank of America reportedly paid 1.5% and 1.7% on average, respectively. Those lower payments to depositors generated roughly $1.1 trillion in additional revenue, about half of total bank income over the period, the Financial Times' calculations indicate.