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Renowned investor Bill Gross bets on regional banking recovery

Published 07/11/2023, 02:04 am
Updated 07/11/2023, 02:04 am
© Reuters.

Esteemed investor Bill Gross has recently shown confidence in the potential recovery of the regional banking sector, which has been significantly impacted by a crisis this year. On Monday, it was reported that Gross has invested in stocks linked to the SPDR S&P Regional Banking ETF (NYSE:KRE), an exchange-traded fund that includes Trust Financial Corp., Citizens Financial (NYSE:CFG) Group Inc., KeyCorp (NYSE:KEY), and First Horizon (NYSE:FHN) Corp. among its holdings.

On November 2, Gross indicated his belief that these banks had reached their lowest point, a statement that coincided with a 4% rally in KRE stocks. This sentiment was echoed by other investors who injected $80 million into KRE on November 1.

Earlier this year, the KRE fund experienced severe turbulence due to issues within the regional banking sector. In March, the collapse of Silicon Valley Bank led to a downturn in regional bank stocks and a surge in activity for KRE, which accumulated over $700 million in investments throughout 2023. The fund's value further plummeted by 38% in May following complications at First Republic that resulted in a takeover by JP Morgan.

Despite these challenges, Gross recognized the long-term value of regional banks on October 30, stating he was waiting for more favorable book valuations and yields. Although KRE remains down by around 28%, Gross's recent investments indicate a belief in the sector's potential for recovery. His position also reflects a broader optimism among investors, as evidenced by the recent influx of investments into KRE.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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