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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.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 5, placing it in top 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $3.16 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.82%.
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 2.64% of total assets, followed by Citizens Financial Group (CFG - Free Report) and Western Alliance Bancorp (WAL - Free Report) .
The top 10 holdings account for about 24.90% of total assets under management.
Performance and Risk
The ETF has added roughly 8.26% and is up about 22.09% so far this year and in the past one year (as of 07/22/2024), respectively. KRE has traded between $38.57 and $56.74 during this last 52-week period.
The ETF has a beta of 1.08 and standard deviation of 30.75% for the trailing three-year period, making it a high risk choice in the space. With about 142 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 the best option for investors seeking exposure to the Financials ETFs segment of the market. Instead, 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 $56.50 million in assets, iShares U.S. Regional Banks ETF has $627.23 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)?
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.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 5, placing it in top 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $3.16 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.82%.
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 2.64% of total assets, followed by Citizens Financial Group (CFG - Free Report) and Western Alliance Bancorp (WAL - Free Report) .
The top 10 holdings account for about 24.90% of total assets under management.
Performance and Risk
The ETF has added roughly 8.26% and is up about 22.09% so far this year and in the past one year (as of 07/22/2024), respectively. KRE has traded between $38.57 and $56.74 during this last 52-week period.
The ETF has a beta of 1.08 and standard deviation of 30.75% for the trailing three-year period, making it a high risk choice in the space. With about 142 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 the best option for investors seeking exposure to the Financials ETFs segment of the market. Instead, 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 $56.50 million in assets, iShares U.S. Regional Banks ETF has $627.23 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.