Investors have been waiting for the financial sector to outpace the broad market for some time. They've been saying that once the big banks get the latest investigation behind them—whether it's for rigging Libor, sketchy foreign exchange trading, etc.—financial stocks will be off to the races. The biggest bullish thesis is that banks should benefit when interest rates start to increase since the spread between what they have to pay depositors and what they can charge borrowers— known as net interest margin—should increase. Net interest margin was above 3.5 percent before the start of the financial crisis. It's now below 3 percent for the first time since the St. Louis Federal Reserve began recording data in 1984. Investors are piling money into financial stocks and ETFs even though those securities have yet to respond to these bullish opinions. Last week, four top financial ETFs took in nearly $1 billion in assets. These financial-focused ETFs are distinct from each other. The number of holdings range from 86 in the Financial Select SPDR fund to 557 in the Vanguard Financials ETF as a result of very different methodologies. Read More Street picks: 10 financial stocks ready to pop Investors focused on improving net interest margins should direct that focus to the Financials Select SPDR (XLF) as that is the purest bank play. Source: ETF.com Not only does XLF have the constituents investors should be looking for, it has also performed well over the past 52 weeks. The fund is the most undervalued of the four with a price-to-book ratio of just 1.38. If XLF has a weakness, it goes back to the way S & P, the publisher of the underlying index, breaks the S & P 500 into sectors. Read More Top stock picker's strategy for the second half S & P considers major financial firms Mastercard (MA) and Visa (V) to be technology stocks. They're constituents in XLK , the Sector SPDR Technology ETF. This won't matter to investors focused on improving net interest margin, but it is a bit of a head-scratcher. This probably isn't important to investors focused on improving bank margins. In fact, it should juice returns as long as rates head in the right direction. Since rising rates might be a problem for stocks, it is refreshing to find an ETF that might actually benefit, and XLF is the best way to play in that space. Scott Nations is president and chief investment officer of NationsShares as well as a CNBC contributor. You can follow Scott on Twitter @ScottNations Disclosure: None
