What the Fed's Stress Tests Mean For Mutual Fund Investors (C, BAC, JPM, More)

Welcome to MutualFunds.com

Please help us personalize your experience and select the one that best describes you.

Your personalized experience is almost ready.

Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission

We hope you enjoy your experience

Channels

Fixed income news, reports, video and more.

Municipal bonds news, reports, video and more.

Practice management news, reports, video and more.

Portfolio management news, reports, video and more.

Retirement news, reports, video and more.

Learn from industry thought leaders and expert market participants.

Deepen your understanding of Responsible Investing and learn how it can potentially help you build a more successful practice.

Advisors

Receive email updates about fund flows, news, upcoming CE accredited webcasts from industry thought leaders and more.

Content focused on helping financial advisors build successful client relationships and grow their business.

Content geared towards helping financial advisors build better client portfolios.

Get insights on the industry trends and investment news from leading fund managers and experts.

What the Fed's Stress Tests Mean For Mutual Fund Investors (C, BAC, JPM, More)

stock market image
After the closing bell on Wednesday, the Federal Reserve announced the results for the big bank stress tests. Here’s what the results mean for mutual fund investors.

Inside the Results

The Fed reported that all of the U.S. banks passed the stress tests, although not every bank will be able to increases dividends. Here is an overview of the results.

Bank of America (BAC) – The bank’s capital plan was approved by the Fed, but the bank will not be able to boost its 5 cent dividend. The bank was told that it would have to resubmit its plans in the fall. BAC has been authorized to buy back up to $4 billion in shares.

Citigroup (C ) – The bank’s plan has been approved. It will finally be able to raise its 1 cent quarterly dividend to 5 cents per share. The bank was also given permission to buy back $7.8 billion in shares.

Goldman Sachs (GS) – Goldman had to make changes to its original plan, but the Fed approved its dividend hike from 60 cents to 65 cents quarterly.

JP Morgan (JPM) – The firm’s adjusted capital plan was approved by the Fed, and the bank was given permission to increase its dividend from 40 cents to 44 cents. The Fed will also allow JPM to buy back $6.4 billion in shares.

Wells Fargo (WFC) – The bank’s capital plan was approved by the Fed. WFC will be boosting its quarterly distribution by 7% and will also be buying back shares.

Morgan Stanley (MS) – Morgan Stanley’s capital plan was approved by the Fed. The bank has been given permission to buy back $3.1 billion in shares, and to raise its dividend from 10 cents to 15 cents.

More Buy Backs and Higher Dividends… For Most Big Banks

Overall, the results from the stress tests were positive, excluding Bank of America’s probationary results. Every big bank except for BAC will be increasing dividends. Investors should also see a boost in buy backs among the banks.

For investors bullish on banks, a mutual fund may be a good choice to gain exposure to the industry.

Mutual Funds to Watch

Investors interested in gaining exposure to the banking industry may be interested in the funds listed below.

The Bottom Line

Investors interested in the banking industry may consider one of the funds listed above. These funds allow investors to gain exposure to the industry, while remaining diversified.

If you’ve enjoyed this article, sign up for the free MutualFunds.com newsletter; we’ll send you similar content weekly.


Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next

stock market image

What the Fed's Stress Tests Mean For Mutual Fund Investors (C, BAC, JPM, More)

After the closing bell on Wednesday, the Federal Reserve announced the results for the big bank stress tests. Here’s what the results mean for mutual fund investors.

Inside the Results

The Fed reported that all of the U.S. banks passed the stress tests, although not every bank will be able to increases dividends. Here is an overview of the results.

Bank of America (BAC) – The bank’s capital plan was approved by the Fed, but the bank will not be able to boost its 5 cent dividend. The bank was told that it would have to resubmit its plans in the fall. BAC has been authorized to buy back up to $4 billion in shares.

Citigroup (C ) – The bank’s plan has been approved. It will finally be able to raise its 1 cent quarterly dividend to 5 cents per share. The bank was also given permission to buy back $7.8 billion in shares.

Goldman Sachs (GS) – Goldman had to make changes to its original plan, but the Fed approved its dividend hike from 60 cents to 65 cents quarterly.

JP Morgan (JPM) – The firm’s adjusted capital plan was approved by the Fed, and the bank was given permission to increase its dividend from 40 cents to 44 cents. The Fed will also allow JPM to buy back $6.4 billion in shares.

Wells Fargo (WFC) – The bank’s capital plan was approved by the Fed. WFC will be boosting its quarterly distribution by 7% and will also be buying back shares.

Morgan Stanley (MS) – Morgan Stanley’s capital plan was approved by the Fed. The bank has been given permission to buy back $3.1 billion in shares, and to raise its dividend from 10 cents to 15 cents.

More Buy Backs and Higher Dividends… For Most Big Banks

Overall, the results from the stress tests were positive, excluding Bank of America’s probationary results. Every big bank except for BAC will be increasing dividends. Investors should also see a boost in buy backs among the banks.

For investors bullish on banks, a mutual fund may be a good choice to gain exposure to the industry.

Mutual Funds to Watch

Investors interested in gaining exposure to the banking industry may be interested in the funds listed below.

The Bottom Line

Investors interested in the banking industry may consider one of the funds listed above. These funds allow investors to gain exposure to the industry, while remaining diversified.

If you’ve enjoyed this article, sign up for the free MutualFunds.com newsletter; we’ll send you similar content weekly.


Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next