Is State Street SPDR S&P Regional Banking ETF (KRE) a Strong ETF Right Now?

The State Street SPDR S&P Regional Banking ETF (KRE) 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?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.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 & IndexThe fund is managed by State Street Investment Management. KRE has been able to amass assets over $3.44 billion, making it one of the larger ETFs in the Financials ETFs. KRE, 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 ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.The fund has a 12-month trailing dividend yield of 2.48%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.Taking into account individual holdings, Cadence Bank (CADE) accounts for about 2.16% of the fund's total assets, followed by First Horizon Corp (FHN) and Valley National Bancorp (VLY).KRE's top 10 holdings account for about 20.25% of its total assets under management.Performance and RiskThe ETF has added about 7.46% so far this year and is down about -3.64% in the last one year (as of 12/02/2025). In the past 52-week period, it has traded between $48.81 and $66.71The fund has a beta of 0.96 and standard deviation of 31.63% for the trailing three-year period, which makes KRE a high risk choice in this particular space. With about 150 holdings, it effectively diversifies company-specific risk .AlternativesState Street SPDR S&P Regional Banking ETF is a reasonable option for investors seeking to outperform the Financials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.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 $51.44 million in assets, iShares U.S. Regional Banks ETF has $543.71 million. KBWR has an expense ratio of 0.35% and IAT changes 0.38%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Regional Banking ETF (KRE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks