Looking for broad exposure to the Financials - Regional Banks segment of the equity market? You should consider the State Street SPDR S&P Regional Banking ETF (KRE), a passively managed exchange traded fund launched on June 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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 Investment Management. It has amassed assets over $4.95 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 2.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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, Popular Inc (BPOP) accounts for about 2.02% of total assets, followed by Cadence Bank (CADE) and Cullen/frost Bankers Inc (CFR).
The top 10 holdings account for about 19.58% of total assets under management.
Performance and Risk
The ETF has added about 13.29% and it's up approximately 16.06% so far this year and in the past one year (as of 02/10/2026), respectively. KRE has traded between $48.81 and $73.63 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 31.48% for the trailing three-year period, making it a high risk choice in the space. With about 148 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street SPDR S&P Regional Banking ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, KRE is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco KBW Regional Banking ETF (KBWR) tracks KBW Nasdaq Regional Banking Index and the iShares U.S. Regional Banks ETF (IAT) tracks Dow Jones U.S. Select Regional Banks Index. Invesco KBW Regional Banking ETF has $54.18 million in assets, iShares U.S. Regional Banks ETF has $659.53 million. KBWR has an expense ratio of 0.35%, and IAT charges 0.38%.
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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State Street SPDR S&P Regional Banking ETF (KRE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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