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Should You Invest in the SPDR S&P Regional Banking ETF (KRE)?
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Looking for broad exposure to the Financials - Regional Banks segment of the equity market? You should consider the SPDR S&P Regional Banking ETF (KRE - Free Report) , a passively managed exchange traded fund launched on 06/19/2006.
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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $2.69 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.14%.
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, Citizens Financial Group (CFG - Free Report) accounts for about 2.54% of total assets, followed by Western Alliance Bancorp (WAL - Free Report) and Webster Financial Corp (WBS - Free Report) .
The top 10 holdings account for about 24.90% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Regional Banking ETF has lost about -2.92% so far, and is up roughly 32.89% over the last 12 months (as of 05/22/2024). KRE has traded between $38.57 and $53.82 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 30.92% for the trailing three-year period, making it a high risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KRE, then, is not a suitable option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
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 $54.27 million in assets, iShares U.S. Regional Banks ETF has $611.03 million. KBWR has an expense ratio of 0.35% and IAT charges 0.40%.
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)?
Looking for broad exposure to the Financials - Regional Banks segment of the equity market? You should consider the SPDR S&P Regional Banking ETF (KRE - Free Report) , a passively managed exchange traded fund launched on 06/19/2006.
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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $2.69 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.14%.
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, Citizens Financial Group (CFG - Free Report) accounts for about 2.54% of total assets, followed by Western Alliance Bancorp (WAL - Free Report) and Webster Financial Corp (WBS - Free Report) .
The top 10 holdings account for about 24.90% of total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Regional Banking ETF has lost about -2.92% so far, and is up roughly 32.89% over the last 12 months (as of 05/22/2024). KRE has traded between $38.57 and $53.82 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 30.92% for the trailing three-year period, making it a high risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. KRE, then, is not a suitable option for investors seeking exposure to the Financials ETFs segment of the market. However, there are better ETFs in the space to consider.
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 $54.27 million in assets, iShares U.S. Regional Banks ETF has $611.03 million. KBWR has an expense ratio of 0.35% and IAT charges 0.40%.
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.