KRE Banking Index

[Running_Man]

With KRE approaching a new low and getting tantalizing closer to my price of 26-28, I looked into the ETF again and began to wonder why the index did not pay a dividend in the 1st quarter so I called them up today and they were very evasive and the person who took my call - Cassandra was reluctant to state how they determined what to pay in dividends, only that they had not enough cash on hand in the first quarter to pay a dividend.

I asked Cassandra if they didn't just collect the dividends and return that as a payout she said that is how it worked after their expenses. I asked her if she had any idea what the 2nd qtr and annual amounts would be and she said she could not say for sure but the best guide would be to use 50 cents per quarter as a proxy which would be 4.7 per cent yield at today's close.

Are ETF's immune from having to file quarterly reports? I see KRE only offers reports for 6/30/07 and 12/31/07 and a prospectus that is of limited value.

 

[RonBoyd]

I don't have an answer to your question about report filing. I am merely curious (if I read this correctly) about the 4q 2007 dividend being roughly double the amount of previous distributions.

ETFConnect - Fund Quick Facts - KBW Regional Banking ETF - KRE

Well, that and does your interest in this ETF indicate a belief that the financial sector has hit bottom?

 

[Disappointed]

RonBoyd: Please note that KRE represents regional banks and may or may not reflect the entire Fianancial Sector.

mP

 

[RonBoyd]

RonBoyd: Please note that KRE represents regional banks and may or may not reflect the entire Fianancial Sector./quote]

Yeah, I know. Merely curious about the thought processes going on here.

 

[Running_Man]

I don't have an answer to your question about report filing. I am merely curious (if I read this correctly) about the 4q 2007 dividend being roughly double the amount of previous distributions.

ETFConnect - Fund Quick Facts - KBW Regional Banking ETF - KRE

Well, that and does your interest in this ETF indicate a belief that the financial sector has hit bottom?

I am assuming that there is going to be a leg down to 26-28 in the financial sector, but that the stocks are nearing a low. Many typical banking declines last around 18-24 months when the problems have occured in the past so with the seriousness of the housing problem I expected about that long of a correction with about 40-50 percent decline, which would take into the latter half of this year if you assume the decline started in March of 2007 then anytime from August to Jan 08 would be a reasonable time frame and 26-28 as a reasonable price to expect from a high of about 51. this was the scenario I postulated for myself at the start a little over a year ago and so far the prices have correlated pretty well with the hypothesis. If the index continues to act as I expect I will be buying some financial stocks at that point.

I want to get a grasp on what the KRE ETF is actually doing with their dividends so sporatic in nature. I've downloaded the holdings and the percents as of 6/03/08 so I will see what the dividend yield should be in theory.


I had assumed the 4Q dividend had doubled because Synovous Financial had spun off a division and paid an extrordinary dividend with the proceeds. However after speaking with the rep I had the feeling they do not want the real reason revealed for the 1st quarter non-payment, but that is just based on the manner on which she responded to my questions (sheepishly and very hesitant to respond with detail.)

 

[RonBoyd]

Thank you. You seem informed enough for me. <grin>