iShares U.S. Regional Banks ETF is more affordable with a lower expense ratio and offers a higher dividend yield than its counterpart.
First Trust Nasdaq Bank ETF provides exposure to massive institutions like JPMorgan Chase & Co., while iShares U.S. Regional Banks ETF targets smaller regional lenders.
While iShares U.S. Regional Banks ETF outperformed over the last year, First Trust Nasdaq Bank ETF has delivered higher cumulative growth over the past five years.
iShares U.S. Regional Banks ETF (NYSEMKT:IAT) provides concentrated exposure to regional lenders, while First Trust Nasdaq Bank ETF (NASDAQ:FTXO) offers a broader, multi-cap bank portfolio with higher operating costs.
Bank stocks serve as the backbone of the financial sector, but banking can mean very different things depending on a fund's specific index strategy. This match-up explores whether a focused regional approach or a broader bank strategy provides the better fit for your portfolio objectives.
| Metric | IAT | FTXO |
|---|---|---|
| Issuer | iShares | First Trust |
| Share price | $57.19 (as of 2026-10-15) | $38.63 (as of 2026-10-15) |
| Expense ratio | 0.37% | 0.6% |
| 1-yr return (as of Oct. 15, 2026) | 17.4% | 13.4% |
| Dividend yield | 2.9% | 2.0% |
| Beta | 0.92 | 0.93 |
| AUM | $606.6M | $238.3M |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares fund is significantly more affordable, carrying an expense ratio of 0.37% compared to 0.6% for the First Trust fund. Additionally, investors in the iShares fund currently receive a higher payout based on recent distributions.
| Metric | IAT | FTXO |
|---|---|---|
| Max drawdown (5 yr) | (55.6%) | (46.6%) |
| Growth of $1,000 over 5 years (total return) | $1,064 | $1,290 |
First Trust Nasdaq Bank ETF focuses entirely on the financial services sector. Its 50 holdings are selected based on liquidity and fundamental factors, and its largest positions include Wells Fargo & Company (NYSE:WFC) at 8.08%, JPMorgan Chase & Co. (NYSE:JPM) at 7.95%, and Citigroup (NYSE:C) at 7.90%. Launched in 2016. First Trust Nasdaq Bank ETF has paid $0.77 per share over the trailing 12 months, which, on its recent ~$38.63 share price, works out to a 2% yield.
iShares U.S. Regional Banks ETF focuses its 30 holdings on regional banks (58%) and diversified banks (42%). Top holdings include U.S. Bancorp (NYSE:USB) at 15.09%, PNC Financial Services Group (NYSE:PNC) at 14.46%, and Truist Financial (NYSE:TFC) at 9.60%. Launched in 2006. iShares U.S. Regional Banks ETF has paid $1.64 per share over the trailing 12 months, which, on its recent ~$57.19 share price, works out to a 2.9% yield.
For more guidance on ETF investing, check out the full guide at this link.
When comparing the iShares U.S. Regional Banks ETF (IAT) and the First Trust Nasdaq Bank ETF (FTXO), investors should consider several key factors. Let's see what they tell us about each fund.
First, we should examine each fund's strategy. IAT leans heavily into major regional bank stocks. All in all, it holds about 30 stocks. FTXO, on the other hand, holds about 50 stocks, with major mega-cap bank stocks taking up the lion's share of its allocation.
Two other important factors are historical performance and income potential. Since 2021, FTXO has generated a total return of 26%, equating to a compound annual growth rate (CAGR) of 4.8%. IAT, by contrast, has delivered a total return of just 5%, with a 0.9% CAGR. As for income, IAT has an advantage. It boasts a dividend yield of 2.8%, while FTXO offers 2%.
One final factor to weigh is cost. IAT is more affordable, with an expense ratio of 0.38%, while FTXO is higher at 0.60%. For context, a person who buys $10,000 of each fund should expect to pay $38 in annual fees for their IAT shares and $60 in annual fees for their FTXO shares.
In summary, although IAT and FTXO both hold financial stocks, their strategy, costs, historical performance, and income potential vary significantly. IAT will appeal to investors seeking greater regional lending exposure in their portfolios, as well as those who prioritize income generation and lower costs. FTXO, on the other hand, has provided better historical returns, albeit at a higher cost and with a higher concentration of mega-cap bank stocks.
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Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase, Truist Financial, and U.S. Bancorp. The Motley Fool has a disclosure policy.