With mergers and acquisition activity picking up, regional banks and financial sector ETFs that track smaller firms could benefit from the increased consolidation. There were 35 deals in the regional banking space last year, the highest number since 1999, and with the 2020 presidential election looming, buyers may be in a hurry to lock in deals in the first half of the year before a potentially new president comes to office, MarketWatch reports. “Bankers might have a short window to get those deals done,” S&P Global Market Intelligence said in a note.

Albeit the Q2 earnings season reflects a bumpy ride for small-cap stocks, a few sectors offer better growth rates, putting the related ETFs under the spotlight.

Total S&P 600 earnings for Q3 are expected to be down 19.5% from the same period last year on 3.6% higher revenues. However, these sectors outperformed.

U.S. treasury yield curve is steepening -- a great scenario for financial ETFs.