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Should You Invest in the SPDR S&P Regional Banking ETF (KRE)?
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The SPDR S&P Regional Banking ETF (KRE - Free Report) was launched on 06/19/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Regional Banks segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.61 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Regional Banks segment of the equity market. KRE seeks to match the performance of the S&P Regional Banks Select Industry Index before fees and expenses.
The S&P Regional Banks Select Industry Index represents the regional banks segment of the S&P Total Market Index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.16%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, First Horizon Corporation (FHN - Free Report) accounts for about 2.81% of total assets, followed by M&t Bank Corporation (MTB - Free Report) and People's United Financial Inc. .
The top 10 holdings account for about 21.72% of total assets under management.
Performance and Risk
The ETF has lost about -9.61% so far this year and was up about 1.63% in the last one year (as of 04/25/2022). In that past 52-week period, it has traded between $59.87 and $78.78.
The ETF has a beta of 1.23 and standard deviation of 41.27% for the trailing three-year period, making it a high risk choice in the space. With about 139 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KRE is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco KBW Regional Banking ETF (KBWR - Free Report) tracks KBW Nasdaq Regional Banking Index and the iShares U.S. Regional Banks ETF (IAT - Free Report) tracks Dow Jones U.S. Select Regional Banks Index. Invesco KBW Regional Banking ETF has $83.54 million in assets, iShares U.S. Regional Banks ETF has $1.07 billion. KBWR has an expense ratio of 0.35% and IAT charges 0.41%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the SPDR S&P Regional Banking ETF (KRE)?
The SPDR S&P Regional Banking ETF (KRE - Free Report) was launched on 06/19/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Regional Banks segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Regional Banks is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.61 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Regional Banks segment of the equity market. KRE seeks to match the performance of the S&P Regional Banks Select Industry Index before fees and expenses.
The S&P Regional Banks Select Industry Index represents the regional banks segment of the S&P Total Market Index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.16%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, First Horizon Corporation (FHN - Free Report) accounts for about 2.81% of total assets, followed by M&t Bank Corporation (MTB - Free Report) and People's United Financial Inc. .
The top 10 holdings account for about 21.72% of total assets under management.
Performance and Risk
The ETF has lost about -9.61% so far this year and was up about 1.63% in the last one year (as of 04/25/2022). In that past 52-week period, it has traded between $59.87 and $78.78.
The ETF has a beta of 1.23 and standard deviation of 41.27% for the trailing three-year period, making it a high risk choice in the space. With about 139 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KRE is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Invesco KBW Regional Banking ETF (KBWR - Free Report) tracks KBW Nasdaq Regional Banking Index and the iShares U.S. Regional Banks ETF (IAT - Free Report) tracks Dow Jones U.S. Select Regional Banks Index. Invesco KBW Regional Banking ETF has $83.54 million in assets, iShares U.S. Regional Banks ETF has $1.07 billion. KBWR has an expense ratio of 0.35% and IAT charges 0.41%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.