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Is SPDR S&P Regional Banking ETF (KRE) a Strong ETF Right Now?
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The SPDR S&P Regional Banking ETF (KRE - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KRE has been able to amass assets over $3.45 billion, making it one of the largest ETFs in the Financials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Regional Banks Select Industry Index.
The S&P Regional Banks Select Industry Index represents the regional banks segment of the S&P Total Market Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for KRE are 0.35%, which makes it one of the least expensive products in the space.
KRE's 12-month trailing dividend yield is 2.07%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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.
When you look at individual holdings, Truist Financial Corp (TFC - Free Report) accounts for about 4.34% of the fund's total assets, followed by Citizens Financial Group (CFG - Free Report) and M + T Bank Corp (MTB - Free Report) .
KRE's top 10 holdings account for about 35.02% of its total assets under management.
Performance and Risk
The ETF has lost about -5.12% so far this year and is up roughly 17.98% in the last one year (as of 03/24/2025). In the past 52-week period, it has traded between $45.75 and $68.90.
The ETF has a beta of 1.08 and standard deviation of 31.06% for the trailing three-year period, making it a high risk choice in the space. With about 141 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $51.32 million in assets, iShares U.S. Regional Banks ETF has $730.01 million. KBWR has an expense ratio of 0.35% and IAT charges 0.40%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
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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Is SPDR S&P Regional Banking ETF (KRE) a Strong ETF Right Now?
The SPDR S&P Regional Banking ETF (KRE - Free Report) made its debut on 06/19/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. KRE has been able to amass assets over $3.45 billion, making it one of the largest ETFs in the Financials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Regional Banks Select Industry Index.
The S&P Regional Banks Select Industry Index represents the regional banks segment of the S&P Total Market Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for KRE are 0.35%, which makes it one of the least expensive products in the space.
KRE's 12-month trailing dividend yield is 2.07%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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.
When you look at individual holdings, Truist Financial Corp (TFC - Free Report) accounts for about 4.34% of the fund's total assets, followed by Citizens Financial Group (CFG - Free Report) and M + T Bank Corp (MTB - Free Report) .
KRE's top 10 holdings account for about 35.02% of its total assets under management.
Performance and Risk
The ETF has lost about -5.12% so far this year and is up roughly 17.98% in the last one year (as of 03/24/2025). In the past 52-week period, it has traded between $45.75 and $68.90.
The ETF has a beta of 1.08 and standard deviation of 31.06% for the trailing three-year period, making it a high risk choice in the space. With about 141 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Regional Banking ETF is not a suitable option for investors seeking to outperform the Financials ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $51.32 million in assets, iShares U.S. Regional Banks ETF has $730.01 million. KBWR has an expense ratio of 0.35% and IAT charges 0.40%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
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.