On March 10, 2023, the tech-heavy Silicon Valley Bank (SVB) collapsed, causing U.S. bank stocks to suffer their largest losses since the 2008 financial crisis.
Since Silicon Valley Bank’s collapse, the Federal Deposit Insurance Corp. stepped in as regulators to guarantee deposits and lessen SVB’s impact on the broader banking sector. However, the crisis is still creating volatility and financial losses for investors exposed to exchange-traded funds (ETFs) within the financial sector.
To help you learn more about what the SVB crisis means for ETFs, U.S. News & World Report recently turned to Dan Tolomay, chief investment officer of Trust Company of the South, for insight.
“The more concentrated or homogenous the holdings of an ETF, the more impact bad news hitting a particular industry or large industry player will have on it,” Tolomay tells the publication. “Conversely, the more diversified the ETF, the less volatility it should experience.”
As a result, while there are still risks in the sector, the recent banking crisis could also create buying opportunities for ETFs, as long as you have an experienced advisor to help guide you toward the right investments.
Click here to read the entire U.S. News & World Report article.