Investing in bank stocks provides exposure to the financial sector and, traditionally, the opportunity to earn dividends from relatively stable companies that operate in a highly regulated industry. However, banking stocks currently face challenges from downturns in the economy, increasing funding costs, and tightening regulations.

Better performing bank-themed exchange-traded funds (ETFs) to consider for the fourth quarter hold a portfolio of some of the nation's largest banks. Below, we outline three relatively well-performing bank ETFs, excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). All data below is as of Sept. 25.

SPDR S&P Bank ETF (KBE)

• Performance Over 1 Year: -18.3%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 3.34%
• Three-Month Average Daily Volume: 2,578,861
• Assets Under Management: $1.13 billion
• Inception Date: Nov. 8, 2005
• Issuer: State Street Global Advisors

This ETF seeks to provide similar returns to the S&P Banks Select Industry Index, an equal-weight benchmark comprising U.S. banking companies. KBE provides exposure to banking sub-industries, such as asset management, custody, regional banking, and mortgage finance.

Several well-known banks in the fund's portfolio of 90 holdings include sector bellwethers JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), and Citigroup Inc. (C), as well as regional bank PNC Financial Services Group Inc. (PNC).

Invesco KBW Bank ETF (KBWB)

• Performance Over 1 Year: -19.42%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 3.69%
• Three-Month Average Daily Volume: 862,428
• Assets Under Management: $1.66 billion
• Inception Date: Nov. 1, 2011
• Issuer: Invesco

KBWB aims to track the performance of the KBW Nasdaq Bank Index, a modified market-capitalization-weighted benchmark comprising large national U.S. banks, regional banks, and thrift institutions.

This ETF’s basket holds a variety of respected names across the banking sector, including JPMorgan, Goldman Sachs Group Inc. (GS), and Morgan Stanley (MS). KBWB rebalances on a quarterly basis.

First Trust Nasdaq Bank ETF (FTXO)

• Performance Over 1 Year: -21.57%
• Expense Ratio: 0.6%
• Annual Dividend Yield: 3.52%
• Three-Month Average Daily Volume: 34,547
• Assets Under Management: $127.9 million
• Inception Date: Sept. 20, 2016
• Issuer: First Trust

The fund, which rebalances quarterly, has an investment objective to deliver a return that corresponds to the Nasdaq US Smart Banks Index, a benchmark consisting of U.S. banking companies selected by liquidity, volatility, value, and growth factors.

FTXO’s top four holdings—Wells Fargo, JPMorgan, Citigroup, and Bank of America Corp. (BAC)—carry a cumulative weight of 32.94%.

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As of the date this article was written, the author does not own any of the above ETFs.