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Should You Invest in the SPDR S&P Regional Banking ETF (KRE)?
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Launched on 06/19/2006, the SPDR S&P Regional Banking ETF (KRE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Regional Banks segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $3.31 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.79%.
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.
Looking at individual holdings, Western Alliance Bancorp (WAL - Free Report) accounts for about 2.48% of total assets, followed by Columbia Banking System Inc (COLB - Free Report) and Valley National Bancorp (VLY - Free Report) .
The top 10 holdings account for about 22.58% of total assets under management.
Performance and Risk
The ETF return is roughly 10.63% so far this year and was up about 41.97% in the last one year (as of 09/24/2024). In that past 52-week period, it has traded between $38.57 and $59.23.
The ETF has a beta of 1.07 and standard deviation of 30.87% 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. 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 $51.45 million in assets, iShares U.S. Regional Banks ETF has $640 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)?
Launched on 06/19/2006, the SPDR S&P Regional Banking ETF (KRE - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Regional Banks segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $3.31 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.79%.
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.
Looking at individual holdings, Western Alliance Bancorp (WAL - Free Report) accounts for about 2.48% of total assets, followed by Columbia Banking System Inc (COLB - Free Report) and Valley National Bancorp (VLY - Free Report) .
The top 10 holdings account for about 22.58% of total assets under management.
Performance and Risk
The ETF return is roughly 10.63% so far this year and was up about 41.97% in the last one year (as of 09/24/2024). In that past 52-week period, it has traded between $38.57 and $59.23.
The ETF has a beta of 1.07 and standard deviation of 30.87% 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. 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 $51.45 million in assets, iShares U.S. Regional Banks ETF has $640 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.