VISA IPO Benefits Bank ETFs

One group of beneficiaries of today’s VISA IPO were the banks that own VISA (NYSE: V).

We previewed this opportunity in our posting Focus on Dividend ETFs that highlighted State Street’s KBW Regional Banking ETF (Amex: KRE). Although the S&P 500 was down 2.4% today, KRE was only down 1.5%, due partially to the lift from the VISA IPO.

The bigger banks also outperformed the market, at least through the morning.

According to VISA, the top three stakeholders will get about $2.4 billion of the IPO proceeds, with about $1.3 billion going to JPMorgan (NYSE: JPM), about $626 million to Bank of America (NYSE: BAC) and about $436 million to National City (NYSE: NCC). National City confirmed that it sold only about 1/3 of its holdings meaning that it would continue to benefit from the run up in VISA’s share price.

All 3 banks are components of State Street’s KBW Banking ETF (Amex: KBE). KBE was up 2% against a flat S&P 500 at noon today before falling sharply to come in line with the broader market at the end of the trading day.

See the State Street website for more information on KRE and KBE.

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