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The recent bloodbath in shares of SVB Financial Group (NASDAQ:SIVB) has sent shockwaves through the financial sector, leading to a sharp drop in many exchange traded funds tied to the parent of Silicon Valley Bank.
Halted at the start of trading, SVB Financial Group (SIVB) had plunged by 60% in premarket trading, adding to the 60% drop the stock saw the previous day. The unraveling took place as the company attempted to restructure its balance sheet, before running into problems raising capital.
As the shares of the bank crash, the slide has pulled down a handful of exchange traded funds that have heavy weightings towards the company. SIVB is currently owned by 200 different ETFs. Here are the five with the largest weightings towards SIVB:
- BlackRock Future Financial & Technology ETF (BPAY) 4.34% allocation.
- iShares U.S. Regional Banks ETF (NYSEARCA:IAT) 3.21% allocation.
- Invesco KBW Bank ETF (NASDAQ:KBWB) 2.95% allocation.
- SPDR S&P Regional Banking ETF (KRE) 2.36% allocation.
- Invesco S&P 500 GARP ETF (SPGP) 2.15% allocation.
Friday’s price action: BPAY -5%, IAT -3.5%, KBWB -3%, KRE -3.9%, SPGP -1.8%.
SVIB’s collapse has also sent ripples towards the whole banking sector along with the world’s largest financial ETF. Early on in Friday’s action, the Financial Select Sector SPDR Fund (NYSEARCA:XLF) slid 1.5%.
SVIB’s drop off comes as the company announced a repositioning of its balance sheet and looked to sell $1.75B of common and preferred stock to boost its liquidity. SVB Financial has now hired advisers to explore a potential sale.
