ASX:BNKS is an ETF with a range of large cap financials. The picture below shows the individual holdings inside the ETF with the top two showing two different indexes for comparison. Holdings are not equal weighted. I note that ASX:BNKS has outperformed US and XJO by nearly 8% (Jan 4 distribution added back in) in a week - see bottom picture. The financials have also not been subject to the same selloff compared with other stock classes. Similarly, another financial I have, ASX:MOT (private credit) is climbing well above NTA which is while nice I am unable to know what it means.Can I ask if you all think the price of money is definitely on the way up? Does it mean that higher money costs (normalising interest rates) = more margin for banks = higher profits? Or does it mean higher defaults that offset profitability? I do wonder about the risk of financials exposure at this point in time. Since it looks attractive but if interest rates rise and it causes a crash/major defaults, how the freak do economies and financials recover from that given the current low base?
