Over the past six months, a portfolio of stock in minority banks beat the S&P 500. The S&P 500 Index (green) returned 74% The Minority Bank portfolio (blue) returned 112%.
Much of this performance has been due to the increased attention being paid to the minority banking sector. The portfolio consists of equal weights in the following banks:
Symbol Name Ethnic Group
BOH Bank of Hawaii Corporation Hispanic
BPOP Popular, Inc. Hispanic
BYFC Broadway Financial Corporation Black
CARV Carver Bancorp, Inc. Black
CATY Cathay General Bancorp Asian
CZBS CITIZENS BANCSHARES CORP GA Black
EWBC East West Bancorp, Inc. Asian
HAFC Hanmi Financial Corporation Asian
HRBK HARBOR BANKSHARES CORP Black
IBOC International Bancshares Corp Hispanic
IBWC IBW FINANCIAL CORP Black
MFBP M & F BANCORP INC Black
PFBC Preferred Bank Hispanic
Now, there are a few things to keep in mind:
It's hard to actually buy this portfolio, mainly because stock in Black-owned banks is hard to come by. It is thinly traded and very illiquid. We are aware of a few with selected availability, but this is the exception, not the rule. Reach out to firstname.lastname@example.org for more information.
We do not expect this situation to last. Most of the overperformance is due to investments made by large non-minority banks, like JP Morgan, Morgan Stanley, Citibank and Wells Fargo. You can't expect that these institutions will continue to pump up minority bank stocks.