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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.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 1, placing it in top 6%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $5.25 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 2.30%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, M + T Bank Corp (MTB - Free Report) accounts for about 5.02% of total assets, followed by Huntington Bancshares Inc (HBAN - Free Report) and Regions Financial Corp (RF - Free Report) .
The top 10 holdings account for about 37.25% of total assets under management.
Performance and Risk
So far this year, KRE has gained about 33.61%, and is up roughly 58.75% in the last one year (as of 11/26/2024). During this past 52-week period, the fund has traded between $44.11 and $68.90.
The ETF has a beta of 1.05 and standard deviation of 31.92% for the trailing three-year period, making it a high risk choice in the space. With about 145 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 great choice 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 $65.41 million in assets, iShares U.S. Regional Banks ETF has $773.71 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.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 1, placing it in top 6%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $5.25 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 2.30%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, M + T Bank Corp (MTB - Free Report) accounts for about 5.02% of total assets, followed by Huntington Bancshares Inc (HBAN - Free Report) and Regions Financial Corp (RF - Free Report) .
The top 10 holdings account for about 37.25% of total assets under management.
Performance and Risk
So far this year, KRE has gained about 33.61%, and is up roughly 58.75% in the last one year (as of 11/26/2024). During this past 52-week period, the fund has traded between $44.11 and $68.90.
The ETF has a beta of 1.05 and standard deviation of 31.92% for the trailing three-year period, making it a high risk choice in the space. With about 145 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 great choice 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 $65.41 million in assets, iShares U.S. Regional Banks ETF has $773.71 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.