JPMorgan Chase & Co. JPM with a market capitalization of approximately $965 billion, stands on the brink of a defining moment in financial history. As Wall Street's dominant lender, its shares have surged an impressive 20.6% over the past three months, bringing the banking giant closer than ever to becoming the world's first trillion-dollar bank.
This extraordinary momentum has not only captivated Wall Street but also turned the spotlight squarely onto Exchange-Traded Funds (ETFs) that count the bank among their top holdings. As JPMorgan's stock ascends, these ETFs offer investors a strategic avenue to participate in its growth.
While the bank's performance has been nothing short of stellar, understanding the catalysts behind this rally and the strategic advantages of ETFs is crucial before making an investment decision.
What Led to JPM’s Rally?
JPMorgan's recent rally is underpinned by a confluence of powerful factors that set the stage for the stock’s growth trajectory we witnessed of late.
A primary driver has been a massive surge in equity trading revenues, which propelled the bank to record quarterly profits. In the second quarter of 2026, the bank achieved its highest-ever net income of $21.1 billion, which reflected a 41% year-over-year increase. It was also the largest figure ever reported by a U.S. bank.
This financial firepower has enabled JPM to perform aggressive share buybacks, steady dividend hikes, and strategic tech investments, particularly in artificial intelligence (AI) and financial infrastructure, which have further widened its competitive moat over regional rivals.
JPM announced a massive new $50 billion share repurchase program in June 2026, alongside a 10% quarterly dividend increase to $1.65 per share, following a pass in the Federal Reserve's annual stress test.
Such shareholder-friendly announcements have further boosted investor sentiment, helping drive the stock’s recent rally.
This optimism is echoed by Wells Fargo analyst Mike Mayo, who recently raised the price target for JPM, forecasting not only a $1 trillion milestone but also a $2 trillion valuation within the next seven to eight years. This long-term confidence is rooted in CEO Jamie Dimon's leadership and the bank's massive scale — boasting $5.02 trillion in total assets and $2.69 trillion in deposits globally.
The bank's significant investments in high-growth areas, such as AI, are seen as key to outperforming and achieving this ambitious target, paving the way for the stock to continue its strong rally in the long run.
Why ETF Exposure Might Be a Better Strategy?
Despite the rosy outlook, a direct investment in JPMorgan stock at current levels comes with valuation concerns. The stock currently trades at a trailing twelve-month (TTM) price-to-earnings ratio of 15.64, well above its five-year median of 11.35, suggesting the market has already priced in much of the good news.
On the other hand, based on short-term price targets offered by 22 analysts, the Zacks average price target for JPMorgan comes to $369.91, which represents an upside of only 1.9% from its last closing price of $363.11. This suggests that the stock has limited room for further upside in the short term.
Against this backdrop, investing in ETFs that hold JPMorgan as a top component can be a more prudent strategy. This is because an ETF provides exposure to a broad basket of stocks, reducing the risk associated with a single company's performance. Even if the stock experiences volatility, the impact on the ETF's overall value is cushioned by its other holdings.
Investing through an ETF also eliminates the pressure of perfectly timing an entry into a stock trading near all-time highs and considered overvalued by some metrics. Instead, investors can participate in broader market or sector growth while still benefiting from the bank’s position as a core holding.
ETFs to Buy
Considering the aforementioned discussion, investors looking to gain exposure to JPMorgan’s remarkable ascent while maintaining portfolio balance can consider adding the following ETFs to their portfolios:
iShares U.S. Financial Services ETF IYG
This fund, with net assets worth $2.24 billion, offers exposure to investment banks, asset managers, and exchanges in the United States. Of these, JPM holds the first spot in this fund, with a 13.09% weight.
IYG has rallied 12.8% over the past three months and charges 38 basis points (bps) as fees. It carries a Zacks ETF Rank #2 (Buy).
iShares U.S. Financials ETF IYF
This fund, with net assets worth $4.43 billion, offers exposure to banks, insurers, and credit card companies in the United States. Of these, JPM holds the first spot in this fund, with an 11.29% weight.
IYF has soared 12.4% over the past three months and charges 38 bps as fees. It carries a Zacks ETF Rank #2.
State Street Financial Select Sector SPDR ETF XLF
This fund, with assets under management (AUM) worth $58.34 billion, offers exposure to companies in the financial services; insurance; banks; capital markets; mortgage real estate investment trusts (REITs); and consumer finance. Of these, JPM holds the first spot in this fund, with an 11.83% weight.
XLF has rallied 12.4% over the past three months and charges 8 bps as fees. It sports a Zacks ETF Rank #1 (Strong Buy).
Vanguard Financials Index Fund ETF VFH
This fund, with net assets worth $13.6 billion, offers exposure to companies involved in activities such as banking, mortgage finance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporate lending, insurance, and financial investment. Of these, JPM holds the first spot in this fund, with a 10.14% weight.
VFH has gained 12.6% over the past three months and charges 9 bps as fees. It sports a Zacks ETF Rank #1.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JPMorgan Chase & Co. (JPM): Free Stock Analysis Report
State Street Financial Select Sector SPDR ETF (XLF): ETF Research Reports
iShares U.S. Financial Services ETF (IYG): ETF Research Reports
Vanguard Financials Index Fund ETF Shares (VFH): ETF Research Reports
iShares U.S. Financials ETF (IYF): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).