KBWB provides good exposure to the broad US banking market. Its portfolio includes large national money centers, regional banks and thrift institutions that are traded in the US. An index committee determines the funds holdings, while attempting to maintain a market-like exposure. KBWB uses a capped, modified market-cap-weighting strategy that comes close to matching the top-heavy nature of the segment. By industry, the fund strays a bit by including investment management & fund operators, and firms from other industries. Still, KBWB is a nice proxy for the broad industry. The index is rebalanced and reconstituted on a quarterly basis.
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