Own the BetaShares Global Banks ETF? Here’s what you’re invested in

This exchange-traded fund offers investors a portfolio of global bank shares.

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The BetaShares Global Banks ETF (ASX: BNKS) is one of those ASX exchange-traded funds (ETFs) that seems to fly under the radar. Chances are many ASX investors haven’t even heard of BNKS, despite the fact it has been around since 2016.

But in this high inflation, rising interest rate world, bank shares have seen a spike in interest for their supposed inflation-resistant properties. So in light of this, now could be a good time to check out what’s under the hood of this ETF.

The BetaShares Global Banks ETF does pretty much what you would expect it to do. According to the provider, this ETF aims to hold “a diversified portfolio of the world’s largest banks in a single ASX trade”.

BNKS holds 60 different bank shares sourced from around the world, although not Australia, which the provider actively excludes. So don’t expect to see the likes of Commonwealth Bank of Australia (ASX: CBA) or National Australia Bank Ltd (ASX: NAB) here.

What’s under the hood of the BetaShare Global Banks ETF?

Instead, it has significant exposure to US banks, which make up almost 40% of the total BNKS portfolio. Other significant contributors include Canada (18.1%), Britain (7.8%), China (6.4%), and Japan (5.2%).

Of the BetaSahres Global Banks ETF’s 60 bank shares, here are the top 10 that appear in its portfolio as it currently stands:

  1. JPMorgan Chase & Co with a portfolio weighting of 8%
  2. Bank of America Corp with a weighting of 7.1%
  3. Wells Fargo & Co with a weighting of 6%
  4. Royal Bank of Canada with a weighting of 5.4%
  5. The Toronto-Dominion Bank with a weighting of 4.9%
  6. HSBC Holdings plc with a weighting of 4.1%
  7. Citigroup Inc with a weighting of 3.7%
  8. The Bank of Nova Scotia with a weighting of 2.9%
  9. Mitsubishi UFJ Financial Group with a weighting of 2.8%
  10. China Construction Bank Corp with a weighting of 2.6%

So certainly a mixed bag there.

According to BetaShares, this ETF currently offers a trailing 12-month dividend distribution yield of 4%, reflecting the traditionally high levels of dividends that bank shares pay out (a phenomenon not confined to the ASX).

However, this ETF’s performance has hardly set the world on fire in recent years. As of 31 May, BNKS has returned -3.57% over the preceding 12 months. It has averaged a return of 3.71% per annum over the past three years and 2.23% over the past five.  By contrast, an ASX index ETF like the Vanguard Australian Shares Index ETF (ASX: VAS) has averaged 8.06% per annum over the past three years and 8.95% over the past five.

The BetaShares Global Banks ETF charges a management fee of 0.57% per annum.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen has positions in JPMorgan Chase and National Australia Bank Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Banks ETF - Currency Hedged. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended HSBC Holdings. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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