In the midst of the second quarter’s tariff-driven market upheaval and volatility, banks forged relentlessly ahead, logging another strong earnings season. For those seeking targeted exposure to the financial sector that continues to benefit from ongoing volatility this year, the recently launched T. Rowe Price Financials ETF (TFNS ) is worth consideration.
Every major U.S. bank but one notched strong beats in both earnings and revenues in Q2. Of all the major banks, Bank of America was the only one to fall short of analyst expectations in revenue. Goldman Sachs beat revenue expectations by $1.1 billion, reflecting increased trading by investors, reported CNBC. The bank generally has a greater degree of Wall Street exposure than many of the other big banks and benefited big on equity trading in Q2.
Strong trading on the back of increased volatility in the second quarter drove increased revenues for other banks such as Morgan Stanley and Citigroup. Citi traders logged the strongest quarter in the last five years according to Bloomberg. “Markets had its best second quarter performance since 2020 with a record second quarter for Equities,” said Jane Fraser, CEO of Citigroup, reported CNBC. “Banking revenues were up 18% and we continue to be at the center of some of the most significant transactions.”
“Volatility is going to, I suspect, be a feature not a bug of the new world order, and we will benefit from that,” Fraser noted on an analyst call. Banks appear well positioned in the near-term.
Actively Managed Exposure to Banks & the Finance Sector
Despite strong performance from banks in the first half, the macro environment remains one shrouded in uncertainty. With a number of risk factors in play, including the as-of-yet not fully realized inflationary impact of tariffs, geopolitical risks, and potential waning confidence in U.S. assets, keeping portfolios nimble could prove beneficial.
In dynamic market environments, actively managed strategies appear well positioned. With an ability to respond to macro changes and capture the changing opportunity set within equities, these strategies could prove beneficial in the second half.
The actively managed TFNS invests in companies within or that provide services to the financial services sector. These include banking, consumer finance, insurance, capital markets, REITS, mortgage finance, securities exchanges, and more. Top holdings include JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs, as of July 29, 2025.
The fund’s portfolio will generally include between 50-70 companies and is constructed using fundamental analysis from the bottom-up. The fund invests across market caps and fund managers may use value and growth approaches when selecting securities.
TFNS carries an expense ratio of 0.44%.
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