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There’s always a bull market somewhere.

In 2021, two beaten-down industries have made big comebacks: energy and banks.

Both have been underperforming since the financial crisis.

Over the last 5 years, for instance, the SPDR S&P Regional Banking ETF (KRE - Free Report) has gained just 62% while the S&P 500 has jumped 100% and the NASDAQ has soared 173%.

It’s been even worse for the First Trust NASDAQ Community Bank ETF (QABA - Free Report). It is up just 37.1% over the last 5 years.

Are Big Banks Better?

However, the banks have rallied in 2021 with the big banks seemingly outperforming.

The Financial Select SPDR ETF (XLF - Free Report), which includes insurance companies, is up 30% year-to-date and is near its 52-week highs, while the S&P 500 has gained just 16% during that time.

Its 3 largest positions include two of the largest US banks, JPMorgan Chase & Co. (JPM - Free Report) and Bank of America (BAC - Free Report).

They are up 30% and 42%, respectively, this year.

In a Bull Market, Should You Look at Smaller Banks?

But in a bull market in the banks, with earnings on the rise, the smaller banks are well situated to be big winners.

Other than buying the Community Bank ETF, how do you find individual bank stocks to invest in?

At any given time, there can be dozens of Zacks Rank #1 (Strong Buy) and #2 (Buy) bank stocks. And all of them are cheap right now.