Should You Invest in the State Street SPDR S&P Bank ETF (KBE)?

The State Street SPDR S&P Bank ETF (KBE) was launched on November 8, 2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Banking 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.Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $1.34 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Banking segment of the equity market. KBE seeks to match the performance of the S&P Banks Select Industry Index before fees and expenses.The S&P Banks Select Industry Index is a modified equal-weighted index that seeks to reflect the performance of publicly traded companies that do business as banks or thrifts. The Bank Index is currently comprised of common stocks of national money centers and leading regional banks or thrifts listed on the NYSE or another U.S. national securities exchange, or NASDAQ/National Market System.CostsCost 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 2.44%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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, Comerica Inc (CMA) accounts for about 1.25% of total assets, followed by Bankunited Inc (BKU) and Banc Of California Inc (BANC).The top 10 holdings account for about 11.54% of total assets under management.Performance and RiskThe ETF has added about 2.83% so far this year and was up about 14.89% in the last one year (as of 01/06/2026). In that past 52-week period, it has traded between $45.85 and $62.79.The ETF has a beta of 0.95 and standard deviation of 27.96% for the trailing three-year period, making it a high risk choice in the space. With about 104 holdings, it effectively diversifies company-specific risk.AlternativesState Street SPDR S&P Bank ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, KBE is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.First Trust NASDAQ Bank ETF (FTXO) tracks Nasdaq US Smart Banks Index and the Invesco KBW Bank ETF (KBWB) tracks KBW Nasdaq Bank index. First Trust NASDAQ Bank ETF has $273.56 million in assets, Invesco KBW Bank ETF has $6.21 billion. FTXO has an expense ratio of 0.6%, and KBWB charges 0.35%.Bottom 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 Bank ETF (KBE): 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